That’s “p” as in “participation:”
Commerzbank will utilize the German Government’s Financial Markets Stabilization Fund to strengthen its capital base. The bank struck an according agreement with the Stabilization Fund (SoFFin). The SoFFin will make available to Commerzbank a silent participation of EUR 8.2 billion. It will be 100% eligible for Tier1. In addition, SoFFin will grant Commerzbank Group guaranteed funding commitments to the scope of EUR 15 billion to offer additional funding options.
Bar the Bavarian state-owned BayernLB, which tapped the German rescue fund for €5.4bn just over a week ago, and also Hypo Real Estate, Germany’s banks have been slow to access the €500bn on offer – encouraging critics to blame Berlin for designing a scheme that neither compels banks to join nor offers attractive reasons to do so.
The move hikes Commerzbank’s core capital ratio to 11.2 per cent and comes with a divine kicker:
• Blessing: “We are well equipped and will emerge stronger from the financial crisis”
Oh no, sorry. That’s a quotation from the chief executive, Martin Blessing.
Related links:
Commerzbank taps bail-out fund – Reuters
Hype Real Estate bond guarantee