DGAP-News: Hypo Real Estate Holding AG: Sale of Hypo Real Estate Holding AG's participation in Deutsche Pfandbriefbank AG


DGAP-News: Hypo Real Estate Holding AG / Key word(s): Disposal
Hypo Real Estate Holding AG: Sale of Hypo Real Estate Holding AG's
participation in Deutsche Pfandbriefbank AG

17.02.2015 / 14:24

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Sale of Hypo Real Estate Holding AG's participation in Deutsche
Pfandbriefbank AG

Notice inviting expressions of interest

Hypo Real Estate Holding AG (HRE) holds directly 100% of the registered
share capital of Deutsche Pfandbriefbank AG ("pbb"). HRE intends to sell up
to 100% of the share capital in pbb in an open, transparent and
non-discriminatory bidding process, in accordance with the European
Commission's state aid decision (C 15/09 (ex N 196/09)) dated 18 July 2011,
published in the Official Journal of the European Union L 60/1 of 1 March
2012. Parallel to this sale process, HRE is preparing an initial public
offering of its participation as an alternative means of sale. HRE reserves
the right, without advance notice and without giving reasons, to change or
discontinue the sales process and/or the preparation of the initial public
offering at any time.

pbb is a specialist bank for commercial real estate and public investment
finance, based in Munich and incorporated under German law. pbb holds a
leading market position in Europe with a focus on selected core markets:
Germany, the United Kingdom, France, the Nordic region and individual
countries in Central and Eastern Europe. It operates from a range of
locations, including Munich and further German cities as well as London,
Paris, Madrid and Stockholm. Its main funding instrument is the German
covered bond "Pfandbrief". pbb is the largest Pfandbrief issuer by
outstanding volume and ranked among the top 5 covered bond issuers by
volume in Europe in 2013. Starting in 2010, after a phase of stabilisation,
de-risking (including a substantial transfer of non-strategic positions to
the winding up institution FMS Wertmanagement) and restructuring, pbb was
successfully repositioned and established in the lending and funding
markets. It has remained profitable since then and is well capitalised. pbb
operates a fully-fledged banking platform with banking and Pfandbrief
licenses.

As at 30 September 2014, pbb's strategic portfolios comprise a commercial
real estate portfolio of around EUR 23.9 billion and a public investment
finance portfolio of around EUR 9.1 billion (on an Exposure at Default
(EaD) basis). pbb also holds a non-core, broadly matched-funded portfolio
of around EUR 24.9 billion EaD which is in run down and matures by more
than 40% within the next 4-5 years. pbb's strategic portfolio is
diversified geographically (with the regional exposure to Germany
accounting for almost half of the portfolio) and across different product
and client clusters. Around 95% of the total portfolio is rated Investment
Grade based on internal rating models. For further information regarding
pbb please refer to pbb's corporate website at www.pfandbriefbank.com as
well as to the annual and interim reports published.

The sole shareholder of HRE, the German Financial Market Stabilization Fund
(Finanzmarktstabilisierungsfonds, "FMS"), holds a silent participation in
pbb with a nominal amount of EUR 1 billion. FMS expects this amount to be
reimbursed in total prior to the closing of the sales process or the
initial public offering.

Except for representations and warranties which are customary for a share
purchase agreement, neither HRE nor the FMS nor any other entity directly
or indirectly linked to the Federal Republic of Germany aims for
maintaining and/or providing existing and/or new guarantees or other
support measures to the buyer and/or pbb after pbb's privatisation. In
addition, it is intended that contractual obligations between pbb on the
one hand and HRE, the FMS and/or other entities directly or indirectly
linked to the Federal Republic of Germany, on the other hand, are
terminated or at least reduced as much as possible.

HRE reserves the right to restrict the number of parties invited to
participate in the sales process. In doing so, HRE will assess the
expressions of interest based on whether the interested party (1) is able
to present a proposal of the acquisition funding, (2) confirms that it is
committed and capable to conclude the transaction by Q3 2015, (3) is
reasonably capable of receiving all approvals by the relevant competition,
regulatory and other authorities which are either strictly required and/or
which should reasonably be obtained for the acquisition of pbb, including,
but not limited to, the European Commission, the European Central Bank and
the Deposit Protection Fund of the German Banking Association
(Einlagensicherungsfonds des Bundesverbandes deutscher Banken), and (4)
demonstrates that, following the closing of the transaction, the Federal
Republic of Germany cannot directly or indirectly exercise sole or joint
control within the meaning of Art. 3 of the EU Merger Regulation No.
139/2004 over the interested party.

HRE reserves the right to extend the deadline for the submission of
expressions of interest and/or to amend the terms and/or the scope of the
Transaction and/or to discontinue the sales process and/or to discontinue
the initial public offering process, provided that HRE will at all times
act in a way consistent with the principles of an open, transparent and
non-discriminatory bidding process.

Citigroup Global Markets Deutschland AG (Citi) and Deutsche Bank AG (DB)
are acting as Joint Financial Advisors to HRE in connection with this sales
process, with Citi being the point of contact for the Transaction. Written
statements of interest in participating in the sales process must be
submitted by courier, telefax or email only to the contact persons stated
below by no later than 12:00 noon (CET) on 27 February 2015.

Expressions of interest must be submitted in English. They must contain the
interested party's name, address, the names of the responsible persons to
be contacted with questions as well as the names of any mandated advisors.
Expressions of interest on behalf of a third party (including agents and
advisors) will be considered only if a proper power of representation is
submitted in writing.

Following the receipt of written expressions of interest, interested
investors, who meet the conditions specified above, will be required to
sign a customary confidentiality agreement. Subsequently, they will be
invited to take part in the further sales process.

Contact Details:
Frank Vogel  
Managing Director 
Citigroup Global Markets Deutschland AG  
Reuterweg 16 
60323 Frankfurt
Germany Tel.: +49 69 1366 5659
Fax: + 49 69 5 8999 0583
E-Mail: frank1.vogel@citi.com    

Sae-Won Hwang
Director
Citigroup Global Markets Deutschland AG 
Reuterweg 16
60323 Frankfurt
Germany      
Tel.: +49 69 1366 5633
Fax: +49 69 2222 3330 
E-Mail: saewon.hwang@citi.com

The distribution of this notice in certain jurisdictions may be restricted
by law, and recipients should inform themselves about, and observe any
applicable legal or regulatory requirements in relation to, the
distribution or possession of this notice. Neither HRE, nor Citi, nor DB,
nor their or their affiliates' respective directors, officers, employees,
agents, nominees or advisors, accept any liability to any person in
relation to the distribution or possession of this notice in any
jurisdiction. This notice does not constitute an offer to sell or to
subscribe for or purchase any securities by any person. This notice may not
be used for, or in connection with, and does not constitute, any offer to,
or solicitation by, anyone in any jurisdiction or under any circumstance in
which such offer or solicitation is not authorized or is unlawful. There
will be no public offer of securities referred to in this notice in any
jurisdiction in which such an offer or solicitation would be unlawful.



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17.02.2015 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language:    English                      
Company:     Hypo Real Estate Holding AG  
             Freisinger Strasse 5         
             85716 Unterschleissheim      
             Germany                      
Phone:       +49 (0)89 2880 28 201        
Fax:         +49 (0)89 2880 22 28 201     
E-mail:      info@hyporealestate.com      
Internet:    www.hyporealestate.com       
ISIN:        DE0008027707                 
WKN:         802770                       
 
 
End of News    DGAP News-Service  
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324095 17.02.2015