Advertising. Landesbanken are among the largest credit institutions in Germany. They act as state and municipal banks and operate the banking business for the associated federal state. Some Landesbanken are also active as major universal banks today. The clientele includes in particular large companies, institutional investors and wealthy private clients. Meanwhile, some Landesbanken are also active in the broad private customer business, some of which is operated by subsidiaries. In the past few decades, various mergers have created particularly large institutions such as Landesbank Baden-Württemberg (LBBW) and Landesbank Hessen-Thüringen (Helaba).
With around 6,200 employees, Helaba is one of the leading banks in the Frankfurt financial center. Its largest shareholder is the savings bank sector with 88 percent. In addition, the federal states of Hesse and Thuringia together hold 12 percent of the shares. In its function as the Sparkasse central bank and Verbundbank for around 40 percent of all German Sparkassen, Helaba is closely integrated into the Sparkassen-Finanzgruppe. The institute is positioned as a universal bank with a strong regional focus and operates selective international presences. According to analysts, Helaba has good access to capital market refinancing and has a solid risk management system.
The Landesbank Baden-Württemberg (LBBW) is the largest Landesbank in Germany. It is a legal institution under public law with total assets of more than 240 billion euros and around 10,000 employees. The Sparkassenverband Baden-Württemberg holds 40.53 percent of the shares in LBBW’s share capital. In addition, the state capital Stuttgart with 18.93 percent and the state Baden-Württemberg with 40.53 percent are shareholders. The LBBW Group offers its private and corporate customers the full range of products and services of a universal bank. LBBW also acts as the central bank for the savings banks in Baden-Württemberg, Saxony and Rhineland-Palatinate. The group also includes the BW-Bank brand, under which areas such as private customer business and business with small and medium-sized companies have been operating since 2018.
The international rating agencies Standard & Poor’s, Moody’s and Fitch assign investment grade ratings to both institutes. * For investors who are looking for attractive interest rate products and who rely on the creditworthiness of the Landesbanks, creditworthiness-dependent bonds with the Landesbanks as reference borrowers enable above-average fixed interest rates .
Almost eight years with 0.50 percent p.a. Interest or almost nine years with 0.60 percent p.a. interest
The DekaBank 0.50% Helaba creditworthiness-dependent bond 07/2028 (WKN DK0X83) reaches the scheduled date for repayment of the nominal amount (10,000.00 euros) on 07/11/2028. In the DekaBank 0.60% LBBW creditworthiness-dependent bond 07/2029 (WKN DK0X84) this date is set one year later. In return, this paper offers the higher interest rate of 0.60 percent p.a. For the planned annual interest payments and repayment, both bonds require that no so-called credit event occurs with the respective reference debtor, the Landesbank Hessen-Thüringen Girozentrale or the Landesbank Baden-Württemberg.
Possible triggers for a credit event include any form of bankruptcy, non-payment, debt restructuring, or government intervention. If a credit event is detected at the respective reference debtor, there is a risk of losses up to the total loss of the nominal amount invested. In such a case, the investor would no longer receive interest and instead of the nominal amount, a significantly reduced cash settlement amount would be determined before or after the planned repayment date, which can also be zero. In addition to this reference entity risk, there is an issuer risk, as with any bond. This means that, especially in the event of DekaBank’s insolvency, there is a risk of losses or even total loss.
The subscription to both creditworthiness-dependent bonds runs from October 12, 2020 to October 30, 2020, subject to an extension or shortening.
* See also https://www.helaba.com/de/informationen-fuer/investoren/rating/, https://www.lbbw.de/konzern/news-and-service/investor-relations/ratings_7u12dygox_d.html, As of October 5th, 2020
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Disclaimer: The information contained herein does not constitute a recommendation to buy or sell the financial instrument and cannot replace individual advice. This advertising information does not contain all relevant information about this financial instrument. Before making an investment decision in certificates, potential investors are advised to read the securities prospectus in order to fully understand the potential risks and opportunities of the investment decision. The approval of the prospectus by the competent authority is not to be understood as an endorsement of the securities offered. The securities prospectus for the DekaBank 0.50% Helaba creditworthiness-dependent bond 07/2028 and any supplements can be found at https://www.deka.de/deka-gruppe/wertpapierprospekte under the tab “EPBSV-I-20”, the final terms at https://mmscache.deka.de/DE000DK0X832_FT.pdf downloaded. The securities prospectus for the DekaBank 0.60% LBBW creditworthiness-dependent bond 07/2029 and any supplements can be found at https://www.deka.de/deka-gruppe/wertpapierprospekte under the tab “EPBSV-I-20”, the final terms at https://mmscache.deka.de/DE000DK0X840_FT.pdf downloaded. All securities information and the current key information sheet are also available from your Sparkasse or DekaBank Deutsche Girozentrale (www.deka.de), 60625 Frankfurt available free of charge. You are about to acquire a product that is not easy and can be difficult to understand.
If courses / prices are mentioned, these are non-binding and do not serve as an indication of tradable courses / prices. The values given here serve to explain the payout profile of this financial instrument. The values are not a reliable indicator of future performance.
Sales restrictions: Reference is made to special sales restrictions and sales regulations in the various legal systems. In particular, the financial instruments described herein may not be offered for sale or purchase within the United States of America or to or for the benefit of U.S. persons.
Rating from September 25th, 2019, more information at www.deka.de/privatkunden/auslösungen/scope-zertifikate-management-rating
As Head of the Private Banking, Product Management and Product Sales unit of the Deka Group, Hussam Masri is responsible for product development and product management of mutual securities funds, asset management and pension products, certificates and private banking.