- First repayment tranche will amount to € 150 million
- Flexibility to be enhanced by using the remaining framework guarantee for a precautionary shelf issue – no specific plans for placement on the capital markets at present
Wiesbaden, 28 June 2010 – Aareal Bank is starting repayment of the silent participation by the German Financial Markets Stabilisation Fund ("SoFFin") earlier than was announced originally. The international property specialist will transfer a first tranche in the amount of € 150 million to SoFFin. The German Federal Financial Supervisory Authority (BaFin) has approved the repayment. SoFFin provided Aareal Bank with a silent participation totalling € 525 million at the start of 2009. The repayment of the remaining amount will be agreed upon in due course.
In addition, the Management Board decided to utilise the remaining € 2 billion framework guarantee. At present there are no specific plans for placing the shelf issue on the market: as a purely precautionary measure, this will retain the financial flexibility provided by the framework guarantee for the next three years.
For Aareal Bank's shareholders, the two measures are virtually neutral in terms of their impact on income. This is because the relief from the early repayment of the SoFFin silent participation will be virtually neutralised by the additional charges for the remaining guarantees. Aareal Bank’s Tier 1 ratio (in accordance with the Credit Risk Standard Approach – CRSA) was 11.2 per cent as at 31 March 2010. Taking into account the partial repayment to SoFFin, on a pro-forma basis, the ratio would have been 10.5 per cent – a comfortable level, also by international standards.
