In August 2013, Hypo Real Estate Holding AG (HRE Holding) began the process of selling its subsidiary DEPFA Group. A decision was made by the Federal Republic of Germany’s inter-ministerial steering committee in May 2014 not to privatise DEPFA Group but to transfer it to FMS Wertmanagement AöR (FMS-WM), the German government’s winding-up institution for the nationalised HRE Holding AG.

On 19 December 2014, FMS-WM acquired 100% of the shares in Irish bank DEPFA and quickly established a new DEPFA management team who have rolled out a targeted business plan focusing on:

-  Preserving capital and winding down the balance sheet of the Group in a manner designed to maintain value.

-  Optimisation of the funding structure with the surety of backing from FMS-WM

-   Simplification of the corporate organisational structure

In May 2015 FMS-WM purchased hybrid capital debt instruments issued by DEPFA through the funding vehicles: DEPFA Funding II LP, DEPFA Funding III LP and DEPFA Funding IV LP, at a discount of approximately EUR 459 million. The remaining hybrid securities issued by these vehicles not acquired by FMS-WM were subsequently acquired by DEPFA, such that DEPFA and FMS-WM jointly hold 100% of DEPFA's hybrid capital debt instruments with an aggregate nominal value of EUR 1.2 bn.

In January 2016, FMS-WM published a buy-back offer for DEPFA’s covered bonds. This successful buy-back provides the basis for the faster unwinding of the DEPFA Group’s two subsidiaries, DEPFA ACS BANK DAC (DEPFA ACS) and DEPFA Pfandbrief Bank International S. A. (DEPFA PBI). FMS-WM has purchased as of the 29th of July 2016 a total nominal amount of EUR 5.6 bn of DEPFA group covered bonds. Covered bonds in a nominal amount of EUR 2.6 bn were purchased in the context of the public tender offer and a further EUR 3 bn were acquired by FMS-WM under bilateral agreements with investors. 

The purchases by FMS-WM of the various debt instruments issued by the DEPFA group aim at preparing an accelerated wind down of DEPFA. In a next step DEPFA group's liabilities could be reduced and, in cooperation with FMS-WM, the cover pools of DEPFA ACS and DEPFA PBI could be adjusted accordingly. This may significantly reduce DEPFA's balance sheet in the mid-term and this strategy may affect the future market liquidity of the outstanding securities issued by DEPFA ACS and DEPFA PBI.

DEPFA and FMS-WM will assess further measures in compliance with legal requirements to support the accelerated wind down of the DEPFA group. This may include in particular a removal of ratings where there is no contractual requirements to maintain such ratings.

DEPFA is not permitted to underwrite new business. Instead, the remaining portfolio must be unwound in a way that maximises its value. As an independent bank, DEPFA is regulated by the Central Bank of Ireland and subject to Irish banking and supervisory law.

Contact Us

DEPFA BANK plc
1 Commons Street
Dublin 1
Ireland

Tel: +353 1 792-2222
Fax: +353 1 792-2211
Email: Contact via email
Internet: http://www.depfa.com/

Communications: Rachel Martin
Tel: +353 1 792-2144
E-Mail: rachel.martin@depfa.com