Postbank Has EU800 Million in U.S. Real-Estate Investments
By Aaron Kirchfeld
Aug. 12 (Bloomberg) -- Deutsche Postbank AG, Germany's biggest consumer bank by clients, has about 800 million euros ($1.1 billion) of investments linked to U.S. residential mortgages, including subprime loans.
The lender last week moved 600 million euros of investments, including 200 million euros in subprime-related securities, on to its own balance sheet, Postbank spokesman Joachim Strunk said. The 600 million euros stem from liquidity lines to two special- purpose vehicles run by Rhineland Funding Capital Corp., the U.S.-based company whose subprime woes led to a government- sponsored bailout of IKB Deutsche Industriebank AG.
``We still don't see any material effects from our property- related investments,'' Strunk said. Postbank remains ``convinced of the quality of these papers,'' all of which are rated AAA and AA, the highest investment grades, he said.
Germany's financial market was rattled last week after IKB, a mid-sized lender hit by the subprime rout, got a 3.5 billion- euro bailout from KfW Group, Germany's state-owned development bank, and the country's banking associations.
The 800 million euros of U.S. residential mortgage-backed securities, which include subprime-related investments, are held in the form of collateralized debt obligations. Prices for CDOs, which repackage bonds, loans and derivatives into new securities, have tumbled as rising defaults on home mortgages decrease investor appetite for risk.
To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net
Last Updated: August 12, 2007 12:54 EDT |
