Pfandbriefzentrale's chain of protective measures

Pfandbriefzentrale der schweizerischen Kantonalbanken AG, founded in 1931, regularly issues Pfandbrief covered bonds and grants the cantonal banks loans for the same total value and with the same duration to co-finance their mortgage business in return for collateral created by a registered lien. Where a registered lien is concerned, amounts outstanding from covered bonds and mortgage-covered loans, including the accrued interest on them, bear a statutory lien over the mortgage collateral stated and set aside in the member banks' register of liens.

The protection offered by Pfandbriefzentrale covered bonds is five-fold:

• The Pfandbriefzentrale, with its capital, assumes primary liability.
• Secondly, the cantonal banks are liable for their loan subscriptions.
• In most cases, the cantons guarantee the commitments of their respective cantonal banks.
• Mortgage borrowers are liable to the cantonal banks on the one hand
• and on the other hand, the cantonal banks have a lien on their mortgaged properties.

Finally, Pfandbriefzentrale bonds hold the highest rating from the rating agency Moody's and Zürcher Kantonalbank. This means maximum protection for investors.