Commission temporarily authorises recapitalisation and an asset relief for German LBBW
02 July 2009
“An impaired asset relief measure can be a useful instrument for maintaining trust in financial markets”, Kroes said.
The Commission granted temporary clearance to a recapitalisation and an asset relief measure provided to Landesbank Baden-Württemberg (LBBW). The asset relief is to be achieved via a guarantee structure.
The guarantee protects LBBW against credit losses potentially resulting from two separate portfolios of securitised assets. The guarantee is provided for a term of five years and can be terminated at the request of LBBW.
The portfolios covered consist of structured credit products such as residential mortgage backed securities, commercial mortgage backed securities, collateral debt obligations, collateralised loan obligations, and asset backed securities. In addition, LBBW will receive a capital injection of €5 billion from its owners.
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