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Soffin - Hypo Real Estate gets 40 bln in extra guarantees

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Bailed-out German bank Hypo Real Estate (HRE) will temporarily receive an additional 40 billion euros ($51 billion) in guarantees to set up a bad bank, the national bailout fund Soffin said on Friday. The total volume in guarantees will increase to 142 billion euros to avoid liquidity shortages at HRE, Soffin said.

 

  • To set up a bad bank
  • Current guarantees of 102 bln eur mostly used up
  • Additional guarantees to be limited to 3-month period

 

 

HRE, whose business model combined investment banking with real estate finance, was nationalised last year after it became Germany's highest-profile casualty of the credit crunch.

 

When the credit crunch hit HRE, the lender was deemed too important to fail given its weight in Germany's covered bond market, a major source of refinancing for the banking sector in Europe's biggest economy.

 

Now it is restructuring and has bundled into Deutsche Pfandbriefbank its property and public-sector financing businesses, which have a volume of around 130 billion euros -- a third of the bank's former size.

 

New liquidity shortages at HRE could occur if financial markets developed adversely or due to risks related to the settlement and the transfer of risky assets to the bad bank, Soffin said.

 

The current guarantees of 102 billion have been used up to a large extent, financial sources said, adding the additional guarantees will be limited to a period of three months.

 

The bank hopes to win European Union approval for its bailout as early as the fourth quarter, when it also wants to shift 180 billion to 185 billion euros in partly toxic assets to its bad bank dubbed FMS Wertmanagement.

Asymptotix articles about Hypo Real Estate:

  • EU/ECOFIN COUNCIL: Member states stand ready to recapitalise banks ...

    16 Jul 2010 ... Hypo Real Estate, the German bank nationalised during the financial crisis, is set to fail a European stress test that regulators have ...
    www.asymptotix.eu/.../euecofin-council-member-states-stand-ready-recapitalise-banks-further-stress-tests
  • EU Commission DG Competition State aid: Overview of national ...

    to Hypo Real Estate Holding. Decision not to raise objections IP/08/1453. 2 October 2008 .... Hypo Real Estate. 7 May 2009. IP/09/712. Case under assessment ...
    www.asymptotix.eu/.../eu-commission-dg-competition-state-aid-overview-national-measures
  • Seven banks fail EU stress tests | Asymptotix

    23 Jul 2010 ... Germany's Hypo Real Estate and Greece's Atebank were the only non-Spanish institutions to fail. A ragbag of some of Europe's most stretched ...
    www.asymptotix.eu/content/seven-banks-fail-eu-stress-tests
  • BIS Quarterly Review discusses financial turbulence | Asymptotix

    14 Jun 2010 ... Hypo Real Estate Holding, a real estate and public-sector lender based near Munich, has put its exposure to government debt from the four ...
    www.asymptotix.eu/.../bis-quarterly-review-discusses-financial-turbulence
  • State aid: Commission opens in-depth investigation into aid ...

    The European Commission has opened under EC Treaty State aid rules an in-depth investigation into state support measures for German bank Hypo Real Estate. ...
    www.asymptotix.eu/.../state-aid-commission-opens-depth-investigation-aid-package-german-bank-hypo-real-estate
  • Recapitalisation of financial institutions Cases currently under ...

    20 May 2009 ... Hypo Real Estate. 7 May 2009. IP/09/712. Case under assessment. 3. Germany, Austria. Aid package for Bayern LB and its Austrian subsidiary ...
    www.asymptotix.eu/.../recapitalisation-financial-institutions-cases-currently-under-formal-investigation-under-ec-
  • Germany: The Government and the banking system: HRE and ...

    10 Apr 2009... to the banking system that also include a takeover offer launched this week for Hypo Real Estate, the stricken property lender. ...
    www.asymptotix.eu/node/291
  • State aid for banks - Penance for their sins | Asymptotix

    13 Oct 2009 ... German recipients of government help such as Commerzbank, Hypo Real Estate and Landesbank Baden-Württemberg have, in effect, ...
    www.asymptotix.eu/content/state-aid-banks-penance-their-sins
  • Asymptotix

    Hypo Real Estate faces stress test failure · Predictive analytics on SAP with SPSS and InfoSphere Warehouse · Moody's downgraded Portugal's credit rating ...
    www.asymptotix.eu/index.php?page=white-papers
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