Germany’s Soffin bank-rescue fund has increased its guarantees for Hypo Real Estate Holding to €103.5 billion to safeguard the company amid the European debt crisis.
Frankfurt-based Soffin said it reactivated €10 billion in unused guarantees for the Munich-based lender “because of the current situation on financial markets”, it said in a statement yesterday.
“We took this step because of the current market movements to make sure that Hypo Real Estate’s restructuring is not endangered,” Soffin head Hannes Rehm said. “A failure of this complex project would have massive consequences for the German economy, thus we will not do it half-heartedly.”
Germany took over Hypo Real Estate in 2009 to stave off collapse after its Dublin-based Depfa Bank unit could not raise financing when the bankruptcy of Lehman Brothers froze credit markets. Hypo Real Estate said earlier this month it held €72.1 billion of debt in Greece, Italy and Spain. – (Bloomberg)
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