FMS Wertmanagement floats three-year bond
FMS Wertmanagement, the winding-up institution owned by the German government, on Tuesday floated its first public large-volume bond of 2012. The bond has a volume of EUR 3 billion and a maturity of three years. It was sold to domestic and foreign institutional investors with a coupon of 1.375 percent and an issue price of 99.904 percent.
"This is a positive start to the year for FMS Wertmanagement," says Ernst-Albrecht Brockhaus, the Executive Board member responsible for funding. "We were able to benefit from a market environment that has stabilized compared to previous weeks, and the bond's maturity attracted strong interest from investors." Purchase orders totalling around EUR 4.5 billion were entered into the order book during the book building period, which lasted only 90 minutes. Barclays Capital, Commerzbank, Goldman Sachs and Morgan Stanley served as lead managers for this bond.
FMS Wertmanagement was established in July 2010 for the purpose of taking over and unwinding the HRE Group's risk positions and non-strategic operations in ways aimed at minimising losses. Favourable funding conditions in the capital markets are key to this endeavour. FMS Wertmanagement plans to raise a total of at least EUR 20 billion on the capital market in 2012. The Federal Republic of Germany is the sole owner of FMS Wertmanagement via the Financial Market Stabilisation Fund (SoFFin).
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