On Wednesday, the Steering Committee of the German Financial Markets Stabilisation Fund (SoFFin) announced that it has decided to provide Hypo Real Estate with an additional €3.0 billion capital contribution and to extend the €52 billion liquidity guarantee facility through June 30, 2010.
The proposed capital contribution must be approved by Hypo's Supervisory Board under the German stock corporation act, which is expected within the next few days. SoFFin intends to contribute €0.7 billion to Hypo Real Estate Holdings AG (HRE Holding), of which HRE Holding will initially pass on € 0.3 billion to DEPFA Bank plc by a contribution to reserves. In addition, SoFFin will contribute €1.3 billion to Deutsche Pfandbriefbank AG's reserves and a €1.0 billion "silent partnership" contribution.
The €52 billion liquidity guarantee facility was originally scheduled to expire on November 18, 2009. In exchange for an extension to June 30, 2010, Deutsche Pfandbriefbank AG, as beneficiary of the guarantees, will pay SoFFin a pro-rata commitment commission of 0.1% on the undrawn portion of the framework guarantee and a 0.5% p.a. fee on guarantees drawn upon.
Earlier this year, SoFFin became Hypo's 90% shareholder after a tender offer and subsequent share authorization and in October 2009 required the transfer of all minority shareholder interests to the majority shareholder after a year of wrangling with Hypo Real Estate's largest minority shareholder to obtain full control of the company.