Twin Bond Concept

Green Federal securities that are based on an existing conventional Federal security and have matching features to the conventional Federal securities (identical coupons and identical maturity dates) are called “twin bonds”. However, they have different issuance volumes: the conventional Federal security is in each case significantly larger than its green twin and is given its own securities identification number (ISIN).

To ensure good secondary market tradability, the German Finance Agency strongly supports the liquidity of the green twins through its activities in the secondary market. These secondary market trading activities of the German Finance Agency enable banks that are members of the Bund Issues Auction Group to conduct combined sale-and purchase transactions (switch transactions) or single sale or purchase transactions directly with the issuer on a daily basis.

Video: Twin Bond Concept

(English language, film duration 8:18 minutes)

The Twin Bonds of the Federal Government

The twin bond concept gives investors a deep insight into the structures of the market. This applies firstly to the price difference between conventional and green Federal securities, and secondly to the demand preferences of market participants for different maturity classes of green bonds.

Greenium - The Yield Difference of the Twin Bonds

Greenium data is based on Bundesbank reference prices.