Apart from public issuers, the vdp member banks are the most important issuers on the German capital market, which at the end of 2004 had an aggregate bond volume outstanding of 3,130 Billion Euro. The lion’s share of the Pfandbrief banks’ issues are Pfandbriefe. These are bonds covered by commercial or residential mortgage loans (“Hypothekenpfandbriefe”) or loans to public authorities (“Öffentliche Pfandbriefe”). As at the end of 2004 outstandings in Pfandbriefe summed up to 1,010 Billion Euro, 639 Billion Euro of which have been issued by the members of the vdp, the former mortgage banks, which are today the largest part of German Pfandbrief Banks. The outstanding volume is about one third of all German bonds. The Pfandbrief is known as the largest uniform asset class within the European bond market. Apart from US capital markets, the Pfandbrief market is the largest bond market worldwide. Until the middle of the 1990s the large size of the German Pfandbrief market and the unique safety of Pfandbriefe were barely known outside of Germany. Although Pfandbriefe had credit standings comparable to government bonds and an attractive yield pick-up, foreign investors preferred government bonds.

This changed after the Market for Jumbo-Pfandbriefe was established in 1995. On this market large volume issues are traded, which attracts international institutional investors not only because of their pure size but also because of extremely high liquidity. Jumbo-Pfandbriefe today have to have a volume of at least 1 Billion Euros and the market making commitment  of at least three investment banks. These are obliged to quote bid- and ask-prices frequently. That ensures the tradability of Pfandbriefe at any time. Beginning in 1999, issuers of other European countries started issuing Pfandbrief-like products with benchmark sized volumes. These are commonly referred to as Covered Bonds.

The market for Pfandbriefe and Covered Bonds is known for its high transparency standards, several suppliers frequently calculate indices for the whole market and subindices, e. g. for national Covered Bond markets. A sound overview of actual conditions on the German Pfandbrief market is provided by the VDH-Pfandbriefkurve, a yield-curve calculated on a daily basis and measuring the vdp-members’ actual funding levels by Pfandbriefe. This instrument is used by the Pfandbrief Banks primarily as a means of support for their loan granting business and is published worldwide via the vdp’s website, Reuters and print media.