The eighth survey on the vdp Issuance Climate among member institutions of the Association of German Pfandbrief Banks (vdp) shows a slight modification in market sentiment for covered bonds and unsecured bank bonds. Although a general weakening of the positive trend was registered, all aggregated scores remain in positive territory. The score for unsecured bank bonds decreased to +16 points in June 2026, previously +22 points in December 2025. Similarly, the score for covered bonds fell from +14 to +7 points within the last six months. These developments resulted in a decline of the overall score from +17 to +11 points.
Despite the aforementioned tendency for the overall sentiment to decrease, vdp member institutions are recording robust demand for covered bonds, which is reflected in a sub-score of +71 points. This value is significantly above expectations, which were set at +22 points six months ago. In the first five months of the current year, vdp member institutions issued new covered bonds totalling 32.2 billion EUR. This represents a marginal increase of 2% compared to the equivalent period of the previous year. Of this volume, 23.8 billion EUR was attributable to mortgage covered bonds, an increase of 6%, while public covered bonds amounted to 8.4 billion EUR, corresponding to an 8% decrease. In the segment of liquid covered bonds in benchmark format (volume ≥ 500 million EUR), 20 billion EUR was newly placed in the past five months, a figure that matches the previous year's level.
Steffen Stachna, Senior Manager in the Capital Markets division of the vdp, commented on this development by highlighting the strong demand as proof of the crisis resilience of covered bonds, as well as their importance as a funding instrument for issuers and as a high-quality investment product for investors. He further explained that the increased inflation expectations and yield increases originally associated with the Iran war had only caused a temporary issuance pause. The results of the vdp Issuance Climate reflect a currently positive mood among capital market experts, albeit with a slightly dampened outlook for the upcoming months.
Following the successful sales results of the first five months of this year, experts from member institutions are noticeably more restrained regarding future demand over the next six months, which is manifested in a score of +6 points for covered bonds. Nevertheless, positive oversubscription results are still anticipated; the corresponding score for the coming six months stands at +34 points, similar to the current assessment of +37 points. A slight improvement in the achievable asset swap level is expected, with a score of +6 points for development over the next six months, compared to the current -6 points. The premium to German government bonds is still assessed as restrictive for demand, with its score for the coming six months at -38 points, following a current -32 points.
A comparable pattern of clouding sentiment is evident for unsecured bank bonds: While the current assessment stands at +48 points, the score for demand in the coming six months is +4 points. Expectations regarding achievable asset swap spreads in this segment are somewhat more optimistic than for covered bonds, at +16 points for the next six months, after a current +40 points. The majority of respondents (over 60%) anticipate a slight increase in yields for ten-year German government bonds to 3% to 3.2% – compared to the current 3%. Around 10% of experts forecast an increase to over 3.2%, while 30% expect constant or slightly falling yields. The general interest rate development in the coming six months is expected by experts to have a positive impact on future demand for covered bonds and unsecured bank bonds.
