Munich-based Deutsche Pfandbriefbank said on Tuesday it has sold distressed Collateralised Debt Obligations (CDOs) with a notional value of EUR 759 mln to bolster its balance sheet ratios. The portfolio consists primarily of US structured finance assets. The transaction resulted in a small single-digit million euros book gain.
Munich-based Deutsche Pfandbriefbank said on Tuesday it has sold distressed Collateralised Debt Obligations (CDOs) with a notional value of EUR 759 mln to bolster its balance sheet ratios. The portfolio consists primarily of US structured finance assets. The transaction resulted in a small single-digit million euros book gain.
'This sale is the second achievement in recent weeks in the bank's endeavours to improve its balance sheet and reduce complexity to allow it to focus on the strategic core businesses of public sector and real estate finance,' the German lender said in a statement.
On 19 October 2009, the bank announced it had sold its claims related to the Lehman bankruptcy. Deutsche Pfandbriefbank said the timing of the transactions capitalised on the current wave of interest in distressed assets as investors are demonstrating renewed appetite for risk.
The sale was conducted as an auction which generated interest from major US and European investment banks, asset managers, and investment funds. CDOs were awarded to six winning bidders.
Prior to the sale, HRE Group's CDO inventory had amounted to around EUR 2.6 bn (notional value), of which around EUR 1.4 bn were US CDOs. The remaining EUR 1.2 bn were European. The bank said it intends to continue to exploit opportunities which may arise to sell its remaining CDO exposure.
