HSH Nordbank reduces guarantee umbrella provided by federal states

Hamburg/Kiel, March 11, 2011 - HSH Nordbank is to substantially reduce the second-loss guarantee provided by the federal states of Hamburg and Schleswig-Holstein, by EUR 1 billion to EUR 9 billion.

This step has been agreed upon between the bank and the guarantors with effect from 9 March 2011. The agreement has become possible thanks to the successful realignment of the Core Bank and resolutely implemented portfolio wind-down in the Restructuring Unit. By reducing the guarantee umbrella the Bank is cutting its expenditure for the provision of the guarantee by some EUR 40 million a year, to some EUR 360 million. Moreover, the Bank will examine the possibility of further reductions in the second-loss guarantee as the year progresses.

The state parliaments of Hamburg and Schleswig-Holstein had approved a second-loss guarantee of EUR 10 billion for HSH Nordbank that took effect in the second quarter of 2009. In return HSH Nordbank pays a premium of four percent p. a. of the outstanding guarantee amount to the federal states. By the end of 2010 HSH Nordbank had thus paid a total of around EUR 700 million to the states of Hamburg and Schleswig-Holstein for the second-loss guarantee.

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