Property financier Hypo Real Estate Group has been given an extra €10bn in guarantees from the German state stabilisation fund to help strengthen its liquidity.
Soffin, the German Financial Markets Stabilisation Fund, has now given a total of €30bn in guarantees to the troubled bank, and is continuing discussions with Hypo regarding ‘comprehensive liquidity and capital support’.
The guarantees will allow Hypo to collateralise debt securities to be issued.
Hypo, the second largest real estate lender in Germany, was rescued from bankruptcy in early October when it secured a last minute agreement on a €50bn lifeline with a consortium of the German state and banking sector.
The rescue bid, the biggest in German history, came after Hypo was sucked into the global financial turmoil through its inability to refinance debt.