Hypo Alpe Wins Temporary EU Approval for $2 Billion Austrian Aid
By Aoife White & Boris Groendahl. - Dec 5, 2012 11:45 AM GMT+0100
Hypo Alpe-Adria-Bank International AG won temporary European Union approval for the Austrian government to give it 500 million euros ($655 million) plus a state guarantee for the bank’s sale of 1 billion euros of subordinated bonds.
Regulators approved the aid for reasons of financial stability, the European Commission said in an e-mailed statement today. Austria must submit an updated restructuring plan for the nationalized lender within the next two months before the EU can grant final approval.
“Austria now urgently needs to present a comprehensive plan for divesting the operative parts of the bank and winding down the non-viable rest,” EU Competition Commissioner Joaquin Almunia said in the statement.
The bond sale and the capital increase will help fill a 1.5 billion-euro capital gap determined by Austrian regulators, the Austrian Finance Ministry said last month. Hypo said it expects to price the planned 10-year Tier 2 bond similar to securities of Austria’s state railway and road operators.
Austria has committed to certain safeguards for the bank’s risk policies and new lending business to comply with EU state- aid rules, the EU said. Regulators often require limits on banks’ expansion to prevent them profiting from government support.
To contact the reporter on this story: Aoife White in Brussels at
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To contact the editor responsible for this story: Anthony Aarons at
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