July 14, 2020 / 6:42 AM / a month ago

Germany invites bids for state financier Depfa

BERLIN (Reuters) - The German government on Tuesday invited bids for Dublin-based credit institution Depfa bank, as it seeks to draw a line under the country’s largest bailout of the financial crisis more than a decade ago.

Depfa bank and Hypo Real Estate

FMS Wertmanagement [FMSWA.UL], the German government’s financial market stabilisation agency, created to hold assets from lenders which needed help during the 2008 financial crisis said it has mandated Barclays to find a buyer for Depfa.

FMS said interested parties had until August 3 to submit bids for the state financier, which is specialised in issuing covered bonds, known as Pfandbriefe.

Depfa is a former unit of Hypo Real Estate (HRE), which Germany nationalized in 2009. An attempt to sell Depfa for 320 million euros was scrapped in 2014 and the lender was instead transferred to the HRE bad bank FMS Wertmanagement (FMSW).

Depfa, which had been bought by Hypo Real Estate for 5.2 billion euros in 2007, stopped underwriting new business on EU demands after the HRE bailout and focused on winding down its assets and shrinking its capital base.

As of the end of 2019, Depfa had total assets of 8.9 billion euros with its portfolio consisting mainly of loans and bonds to German and other Western European borrowers from the public sector, FMSW said. It’s core equity tier 1 ratio stood at 152.3%.

Reporting by Caroline Copley, editing by Thomas Escritt

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