Wuerttembergische Hypothekenbank (WuerttHyp) is planning to launch its first mortgage-backed transaction in the European market by the end of the month, sources say.

This EURO500 million deal was jointly structured by WuerttHyp and its financial advisor, HypoVereinsbank Real Estate Structured Finance.

It is divided into a Super Senior Swap for approximately EURO450 million and several tranches of Credit-Linked Notes totaling EURO50 million, backed by Pfandbriefe. The reference portfolio consists of a well-diversified pool of German residential mortgages of strong credit quality.

The notes will receive ratings from AAA to BBB by Fitch IBCA and Standard and Poor's Ratings Service. The expected average lives of the notes range from 3.5 to 5 years assuming that the call option is exercised after 5 years.

The bonds will be offered to European investors only, and lead managed by HVB International Markets.

This innovative transaction is an important step for WuerttHyp towards a-state-of-the-art optimization of its asset management and should lead the way to further MBS which HypoVereinsbank Real Estate Structured Finance expects to complete before the end of the year.

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