These Pfandbriefe covered bonds are debt instruments secured by first-lien mortgages on Liechtenstein property.

The banks have established the Liechtensteinisches Pfandbriefinstitut , which will be able to issue Pfandbriefe bonds; the institute “closes a gap in the Liechtenstein capital market and strengthens the long-term stability of the financial centre,” they said in a statement earlier this week.

The new Pfandbriefe act, adopted by the Liechtenstein Landtag legislature in December 2024, effective since April 2025, establishes the legal framework for the LPBI. As a licensed financial institution, the LPBI is directly supervised by the Financial Market Authority Liechtenstein.

The covered bonds are backed by first-lien mortgages on Liechtenstein real estate and are subject to statutory requirements, the statement said.

Pfandbriefe have operated in several jurisdictions, including Switzerland. Their protections consist of two elements: the obligations of the issuing bank and the underlying real estate collateral.

The banks said covered bonds broaden banks’ refinancing base, contributing to the long-term stability of the Liechtenstein real-estate market.

“With the new Pfandbriefinstitut, we are strengthening the stability of the Liechtenstein financial centre and broadening its refinancing landscape. Our clients will also benefit, among other things, from a more resilient mortgage market and improved long-term planning certainty,” Michael Bürge, chief financial officer of LGT Group, said.

Christoph Reich, CEO of LLB, added: “The new covered bond institute establishes infrastructure that opens up additional opportunities for banks and supports the long-term development of the capital market.”

Dr Georg Stöckl will serve as CEO of the joint executive board of the institute; Bettina Halter will become chief risk officer. The LPBI will issue its first covered-bonds in the coming months, the banks added.