Property financier Aareal Bank has secured a guarantee facility of up to EUR 4 bn from the German Financial Markets Stabilisation Fund (Soffin). The guarantees are in addition to a definite agreement reached on a EUR 525 mln silent participation by SoffIn in Aareal.
Property financier Aareal Bank has secured a guarantee facility of up to EUR 4 bn from the German Financial Markets Stabilisation Fund (Soffin). The guarantees are in addition to a definite agreement reached on a EUR 525 mln silent participation by SoffIn in Aareal.
Aareal said in February that it was in talks with SoffIn to strengthen Aareal's balance sheet despite announcing an unaudited pre-tax profit of EUR 117 mln for 2008.
The bank said it had made preventative use of the German government's programme to ensure the long-term future of its sustainably profitable business model and to be well prepared to cope with the economic and financial market crisis.
The EUR 525 million silent participation by Soffin, which carries an interest rate of 9% per annum, is set to be implemented at Aareal Bank by the end of March.
Aareal Bank said on 17 March that it had has made use of the guarantee facility by placing its first guaranteed benchmark bond for a volume of EUR 2 bn with domestic and foreign investors. The bond has a term of three years and a coupon of 2.625%.
