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30.06.2003 – 14:05


KfW and HVB Group new securitization
PROMISE transaction launched with volume of EUR 1.13bn

Frankfurt/Main (ots)

Today, HVB Group, together with joint
bookrunner Citigroup Global Markets Limited, launched its fourth
asset-backed securities transaction under the KfW PROMISE program.
The transaction, named PROMISE Color-2003-1 Plc, has a total volume
of EUR 1.13 bn, of which EUR 238 m will be placed in the capital
markets in the form of ABS notes. This transaction is a further step
by HVB Group towards a successful implementation of its
Transformation Program 2003.
Using the KfW platform will enable HVB Group to achieve regulatory
capital relief, thereby creating capacities for new loans to the
German Mittelstand customers, the credit risk of which could then
also be securitized through potential future transactions.
Within the scope of the Promise Color-2003-1, the credit risk
attached to loans that have been extended to middle-market German
companies is transferred to the capital markets. This transaction
differs from its predecessors in that each loan is collateralized by
mortgage (i. e. a land charge). The portfolio comprises approximately
1,500 loans to nearly 750 borrowers and is highly diversified in
terms of sectors, borrowers and regions. The average size of the
loans is EUR 770,000; loan seasoning is roughly 8.57 years which is
yet another indicator for the strong quality of the portfolio. Over
90% of the loans are amortizing.
Promise Color is a synthetic transaction in which - unlike a true
sale transaction with its additional funding benefit only the credit
risk of the underlying is securitized. The credit risk is transferred
to KfW via a loan loss agreement. KfW hedges itself in the capital
market through Super Senior Swaps and Notes sold on the capital
market. The transaction has a weighted average life of 4.5 years.
Last year HVB Group strengthened its securitization and placed
assets of EUR 20.5bn on the capital market, thus freeing up weighted
risk assets of EUR 12.5bn. Under the Transformation Program 2003,
further strong expansion of securitization activities is planned.
ots Original Text Service: KfW
For further informations:
KfW Group - Ms. Nathalie Drücke 
Phone: +49(0)69 7431-2098; 
HVB Group - Dr. Knut Hansen 
Phone: +49(0)89 378-24644; 

Original content of: KfW, transmitted by news aktuell