Today, Hypo Real Estate Holding AG, one of Germany’s largest real estate lenders, announced that it has applied for a guarantee by the German government’s €500 billion Financial Markets Stabilization Fund (“SoFFin”) to back up its short-term liquidity needs while the €50 billion bailout plan for Hypo RE announced earlier this month is still being finalized. Under its application, Hypo RE requests €15 billion in liquidity from the Deutsche Bundesbank, the German central bank, to cover short-term liquidity requirements before its €50 billion rescue package becomes “fully available by mid-November.”
Hypo RE also announced that it will submit an application to SoFFin for further comprehensive support, including potential capitalization measures, to assist Hypo RE with “additional funding requirements once liquidity facilities extended by the consortium [of German banks] have been disbursed.”
Other German banks that have previously announced intentions to use Germany’s rescue fund include Bayern LB and West LB. It has also been widely reported that HSH Nordbank AG may apply for use of the fund.