SNS Plans to Raise Capital Via Stake Sale, Involve Bond Holders
Jan. 28 (Bloomberg) -- SNS Reaal NV, a Dutch bank and
insurer struggling with losses from real estate, plans to
strengthen capital buffers by selling a stake to private
investors and involve bond holders in a plan that could help
limit the burden on taxpayers.
“The efforts of SNS Reaal are focused on a scenario that
involves the participation of private investors,” the Utrecht-
based company said in an e-mailed statement today. The plan
would include “a significant share issue” while “transactions
with regard to outstanding subordinated instruments are
anticipated,” SNS said.
The company, which acquired ABN Amro’s property-finance
unit in 2006, has been hurt by losses on real estate loans that
left it struggling to repay a government bailout. The bank’s
core Tier 1 capital ratio, a measure of financial strength, fell
to 8.8 percent at the end of the third quarter, below the
European Banking Authority’s 9 percent minimum, as risk-weighted
assets and loan losses in the property-finance unit increased.
SNS, which went public in 2006, is seeking a
“comprehensive solution” for cutting credit risks at the
property-finance unit and to strengthen its capital. The
property unit may be split-off, it said in today’s statement.
It is unclear whether the path SNS is pursuing is feasible
as the parties involved are assessing future losses on real
estate loans, the company said.