FMS Wertmanagement (FMS-WM), the German federal government’s winding-up institution, was able to place a funding volume of EUR 15.4 billion with the capital market in the period from January to the end of July 2017. The original volume of around EUR 12 billion planned for the full 2017 fiscal year has been raised to a target of EUR 19 billion.
In an environment fraught with political uncertainties and volatile market conditions, FMS-WM benefited from increased investor demand for liquid and safe securities on the euro market. The target for pound sterling funding, which in 2017 amounted to around 21 percent of the issue volume to date, has already been met in full. A further 36 percent of the issue volume was denominated in US dollars and 43 percent in euros. In the remainder of the year FMS-WM intends to raise additional funds primarily in euros and pound sterling.
The long-term funding of FMS-WM in euros is to be handled through Bundesrepublik Deutschland Finanzagentur GmbH from 2019. FMS-WM will therefore limit its funding in euros on the capital market to borrowings with a maximum term of three years. FMS-WM will continue to raise long-term foreign currency funding, in particular pound sterling and US dollars, and short-term money market funding itself.
FMS-WM was founded in 2010 with the aim of winding up the risk positions and operations that were transferred to the company from the Hypo Real Estate Group (HRE Group) effective 1 October 2010. As a financially independent entity under public law, FMS-WM defines the best possible wind-up strategies in each case and implements them based on the following maxim: seize opportunities for generating income and minimise losses. FMS-WM is supervised by the Federal Agency for Financial Market Stabilisation (FMSA). The Financial Market Stabilisation Fund SoFFin is obligated without limitation to provide additional funds under Section 8a of the German Law Establishing a Financial Market Stabilisation Fund (Gesetz zur Errichtung eines Finanzmarktstabilisierungsfonds - FMStFG) for losses incurred in winding up the portfolio.