bosmeld
Forumer storico
Why Depfa plc hybrids are falling:
Have a look at http://www.hyporealestate.com/eng/pdf/1001AidA_Antrag_FINAL_e.pdf
There are discussions regarding an inclusion of selected funding instruments in the scope of the transfer to the deconsolidated environment, in addition to assets. However, no transfer of unsecured fundings, Pfandbriefs or other covered bonds issued by Group entities for funding purposes is planned.
So the threat is that Depfa plc and HRE Trust hybrids will be split up, with some fraction of each of them being moved into the bad-bank. [Like the austrians did with Kommunalkreditbank].
But, like JP Morgan I also see difficulties if such a plan could be carried out. So some uncertainties remain. That is a drag on prices, especially for Depfa plc hybrids as they are more likely to end up in the bad-bank. (Most of Depfa plc will be moved into the bad-bank.)
The mentioned "There are discussions" is not at all clear to me. Seems like EU-Commision and/or SoFFin (100% owner of HRE, german gov.) wants the hybrids to share in the losses. But this matter has not yet been sorted out as pref. sec. cannot easily be moved into a badbank.
Anyway, I see the things not as simple as JP Morgan. Judging from what I can see now, the news for Depfa plc hybrids is worse than was expected 3 weeks ago. Depfa II could fall back 14 and Depfa III could fall back to 11-12. I personally would not take them over 10, as their future value remains most uncertain.
The news for HRE-Trust is slightly better. The movement up in prices for the last two weeks was justified, although maybe a bit overextended. After all HRE will at least not pay for the next 2 years and after that it pays only 5,86. With this new uncertainty in place I see no upside potential for HRE-Trust until this matter gets resolved.
It is clear that SoFFin would want to get rid of the hybrids as such a move would facilitate the upcoming reprivatisation of HRE and because the HRE-hybrid (without loss participation and with considerable step up) will lose its equity status in the coming years anyway. So it seems to me as if they want to pave the way for a tender by showing possible ways to make the hybrid participate in the losses. I am sure, SoFFin, investors and EU-Commission would all agree to a tender offer of, say, 40 in the near future.
The situation of Depfa is really difficult.
but i hope that the hybrids of Depfa will remain in the good bank.
but at this time the situation is not clear
JPMorgan is optimistic. but we need more information.
