01 April 2009

Commission temporarily authorises illiquid asset facility for ING

The Commission granted temporary clearance to the illiquid US$ 39 billion asset back-up facility provided by the Dutch State to the financial group ING, with final approval dependent on the result of an in-depth investigation.

The Commission granted temporary clearance to the illiquid asset back-up facility provided by the Dutch State to the financial group ING, with final approval dependent on the result of an in-depth investigation. The Commission found that the measure in favour of ING constitutes state aid. Some of its provisions can be considered in line with the Commission's guidance on the treatment of asset relief measures, and so the measure has been given temporary clearance for six months. Other provisions - including such complex issues such as valuation of the portfolio - require a further in-depth analysis before approval can be given.

 

In January 2009, the Dutch State and ING agreed on a so-called illiquid assets back-up facility for a portfolio of US$ 39 billion par value worth of securitised US mortgage loans, mostly consisting of so-called Alt-A mortgages. Alt-A loans are the category of US loans between prime and sub-prime, often granted on the basis of a simple declaration by the borrower about his income with no other proof required.

 

Under the transaction, the Dutch State will buy the right to receive the cash flows on 80% of this US$ 39 billion portfolio by paying ING about US$ 28 billion. That amount will be paid by the Dutch State in accordance with a pre-agreed payment schedule.

 

Press release

 

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