BayernLabo

Savely investing

Safe, large-volume and corespondingly liquid benchmark bonds with guarantee from the Free State of Bavaria.

Investor Relations: Loans and Debentures with a State Guarantee

As a bank engaged in promoting housing and urban development, BayernLabo is, on the capital markets, a member of the exclusive circle of issuers of bonds underwritten by the government. In the case of BayernLabo, this explicit guarantee is from the Free State of Bavaria. 

The Aaa Rating from Moody’s is derived from this explicit guarantee. In addition, the zero-risk weighing under the Solvency Regulation is in effect, whereby credit institutions with investments in debt securities of BayernLabo do not have to back these with own capital funds or take into account large exposure limits. Based on this, BayernLabo is able to draw on a wide base of investors. 

To raise funds on the capital markets, BayernLabo issues:

  • Large-volume and correspondingly liquid benchmark bonds
  • Promissory note loans
  • Registered bonds
  • Bearer bonds
  • Structured products

Because on the credit side, exclusively the Euro is used as the currency, on the refinancing side, projects are executed in the same currency.

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Solvency and Rating

Top Solvency and a Convincing Credit Rating

Aaa — With a State Guarantee

The attractiveness of BayernLabo debt obligations can be traced to, among other factors, their excellent credit rating, which is based on the unconditional, indefinitely valid, and irrevocable guarantee by the Free State of Bavaria. This permits BayernLabo’s debt obligations to have the same high credit rating for investors as debt obligations of the Free State of Bavaria. 

With its AAA/Aaa ratings, the Free State of Bavaria has been given the highest ratings from Moody’s and Standard & Poor’s. 

Related to the guarantee by the Free State of Bavaria the long-term bonds of BayernLabo are rated with Aaa by Moody's.

Excellent Sustainability Rating

The BayernLabo was positively rated by oekom in May 2016 in its rating as a development bank. Among other things the customer and product responsibility as well as the employment security and employee wellbeing was examined. 

This very positive rating result in the area of sustainable management brings BayernLabo in the position of global industry leader.

Downloads

Confirmation letter of the Refinancing Guarantee (non-binding translation)

Moodys Credit Opinion BayernLabo

Legal Form and Liability

Top BayernLabo — A Development Institute with a Guarantee from the State

One Hundred Percent Liability for all Obligations from the Free State of Bavaria

BayernLabo is a legally dependent institution established under public law within BayernLB that is organizationally and financially independent. According to a decision of the EU Commission, BayernLabo is permitted beyond 18 July 2005 to benefit from state guarantees as a legally dependent institution within an entity of public law (Article 22, paragraph 2 of the Law on Bayerische Landesbank [Bayerische Landesbank Gesetz – BayLBG]). 

This means that the Free State of Bavaria is fully liable for all obligations that BayernLabo takes on (including contracted loans, mortgage bonds of the Bayerische Landesbodenkreditanstalt, bonds, forward transactions, option rights, and loan guarantees). 

This legal guarantee is unconditional, valid indefinitely, and irrevocable and can only be abolished, limited, or changed by a corresponding state law. 

The refinancing guarantee of the Free State of Bavaria is payable on first demand and excludes a default in payment. 

The Free State of Bavaria is one of three states in the Federal Republic of Germany which has been given a Aaa/AAA rating by the leading rating agencies Moody’s and Standard & Poor’s. This excellent Bavarian credit rating supports and underscores the outstanding character of the Free State of Bavaria as a collateral provider of BayernLabo. 

Business Model of BayernLabo

Housing Development and Financing of Regional Authorities for Bavaria

Article 20 of the Law on Bayerische Landesbank stipulates BayernLabo’s intended areas of activity. As a public law institution pertaining to housing, BayernLabo’s primary statutory mandate is to promote housing and urban development in Bavaria.

The key areas of the development programs conducted as fiduciary business and financed by the Bavarian budget are:

In the Bavarian housing program

  • Construction of rental housing; construction and purchase of privately-owned housing
  • Creation of student housing and residences for the disabled

The key areas of the proprietary development programs refinanced through development programs of the KfW Banking Group and on the capital markets are:

In the Bavarian remodeling program

  • Modernization of rental housing and in-patient elderly care institutions

In the Bavarian program offering reduced interest rates

  • Construction and purchase of privately-owned housing

In the Bavarian municipal investment loan program

  • Financing of infrastructure projects

In the Bavarian municipal energy conservation loan program

  • Energy-saving refurbishment of municipal and public infrastructure buildings

BayernLabo has been lending to Bavarian state and local authorities since 2006. The legal basis for this activity was brought about by a change to the Law on Bayerische Landesbank (BayLBG) on 19 July 2005 (Implementation of the Agreement II between EU Commission and German Federal Government). While engaging in state and local authority lending, BayernLabo has limited itself to conducting business exclusively with Bavarian borrowers. 

Sustainability

BayernLabo - Sustainable Company - Since 1884

BayernLabo has been supporting the sustainable development of Bavaria since its foundation in 1884, fulfilling its social and entrepreneurial responsibility. 

Today BayernLabo is a legally dependent institution established under public law within BayernLB that is organizationally and financially independent and has a legal mandate to promote social housing and municipal construction in Bavaria. 

BayernLabo is committed to the public contract. The Free State of Bavaria can rely on the services and the offer of BayernLabo as an institution of state housing policy when fulfilling this contract. 
This housing policy is characterized by two equivalent goals: the preservation of economically powerful and viable urban centers on the one hand and the strengthening of rural areas on the other. These two components are substantial in the promotion of housing and the important stakes of BayernLabo's business activities. 

BayernLabo has been lending to Bavarian state and local authorities since 2006. While engaging in state and local authority lending, BayernLabo is particulary focused to conducting business exclusively with Bavarian borrowers. The focus is on the promotion of investments in general municipal and social infrastructure. 

To finance new and existing loans under the Bavarian subsidised interest rate programme to promote home ownership, the Bavarian modernisation programme, and the municipal investment loan programme to create rental housing in Bavaria, BayernLabo issued its first social bond in November 2017.

With our Social Bond Report 2018 we inform you of the use of the proceeds from the issue of 500 million euros. The figures used in the report reflect the situation as of 31 December 2017.

oekom research has updated its Second Party Opinion from the year 2017, that validates the sustainable added value of the social bond.

Downloads

BayernLabo - Social Bond Report 2018

oekom SPO-BayernLabo

oekom Corporation Rating 2017

Disclaimer

The information and documents on this website do not represent either an offer or invitation for subscribing or purchasing securities. The information and documents are exclusively intended for the purpose of information and do not serve as a basis for contractual or other obligations.