BERLIN (AP) - Troubled German lender Hypo Real Estate said Friday it has been granted euro20 billion ($25 billion) in loan guarantees from a government fund, which comes on top of a previous bailout to stabilize its business amid the financial turmoil.
Munich-based Hypo said it can use the guarantees to collateralize debt securities to be issued, which must be due for repayment by the middle of January 2009 at the latest.
The bank said it will pay the fund a commission of 0.1 percent on the undrawn portion of the guarantee while the fee for the guarantees drawn will be 1.5 percent a year.
The announcement came after the lender reported Monday a net loss of euro3.1 billion in the third quarter.
The bank already received a euro50 billion bailout from the government last month and said Monday in its earnings' statement that it foresees "further negative impacts on earnings in the fourth quarter of 2008 and in 2009."
In a brief statement late Friday, Hypo said "the agreed framework guarantee is a result of the ongoing negotiations of Hypo Real Estate Group with the (German stabilization fund) regarding longer-term and comprehensive liquidity and capital support measures for the Group."
Shares of Hypo Real Estate Group closed up 1.4 percent at euro2.15 ($3.33).
On the Net: http://www.hyporealestate.com |