Press

Eurex, the German-Swiss derivatives market, will launch a Jumbo Pfandbrief future on July 6. It is the first time that an interest-rate derivative based on securities of German issuers other than German government bonds will be tradable on Eurex. According to Eurex, interest in fixed-income securities of private and public-sector issuers will increase with the start of European monetary union. When the Jumbo Pfandbrief future is launched, investors will have a trading and hedging instrument that is tailored to this market segment, is designed to meet international standards and is analogous to the BOBL future contract specifications.

With the purchase of a Jumbo Pfandbrief futures contract, the market participant agrees to take delivery of a Jumbo Pfandbrief with a nominal value of 250,000 DM at a fixed price on a specified future date. Since the first Jumbo Pfandbriefe (Pfandbriefe with an issue amount of at least 1 billion DM) were issued in May 1995, this segment has been growing, with steadily rising issuing volume and increasing participation by domestic and foreign investors. The current volume outstanding is over 300 billion DM.