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Division 5.1 Business activities of the DEPFA plc sub-group

United Kingdom

Original text. Later amendments are not shown.

Germany will ensure that HRE separates itself completely from the business activities of the DEPFA plc sub-group,

  1. (i)

    by foregoing new business in the DEPFA plc sub-group (balance sheet of EUR 248 billion at 31 December 2008) as of the date of notification of the decision at the latest. The following are not ‘new business’ within the meaning of this Commitment Document:

    1. (a)

      restructuring of existing loans in order to maintain value, provided that those loans fall under the management of problem loans;

    2. (b)

      transactions which are necessary in the context of liquidity management of the DEPFA plc sub-group or the winding-up institution, e.g. central bank transactions;

    3. (c)

      management of the cover pools of HPBI and ACS;

    4. (d)

      prolongations which are necessary in order to avoid losses, provided that a prolongation offers significantly better prospects of final realisation;

    5. (e)

      derivative transactions which are necessary in order to manage interest rate, currency and credit risks in the existing portfolio, e.g. asset swaps, provided that they have the effect of reducing the overall market risk position of the DEPFA plc sub-group;

    6. (f)

      business which was fully consolidated in the group financial statement of DEPFA plc or business for which the commercial opportunities and risks already lay predominantly with the DEPFA sub-group;

    7. (g)

      all business which is necessary for regulatory or other legal reasons, including the acquisition, holding and sale of approved securities for management of the cover pools of the DEPFA plc sub-group and for liquidity management of the DEPFA plc sub-group (cf. paragraph 2(iv)); this does not include any budget finance business as a strategic business activity;

    8. (h)

      all business that DEPFA plc and its subsidiary companies conclude for the purpose of refinancing, including new issues and buying back of debt;

    if ‘necessity’ is a requirement of paragraphs 5.1(i)(b), 5.1(i)(d), 5.1(i)(e) and 5.1(i)(g), this means that the measure in question must be capable of achieving the objective that it serves under economically viable and sustainable conditions;

  2. (ii)

    and by

    1. (a)

      the reprivatisation of DEPFA plc and the participations held by DEPFA plc (HPFB, HPBI and ACS) in accordance with paragraph 5.2; or

    2. (b)

      the sale of other credit portfolios and other assets in accordance with paragraph 5.3; or

    3. (c)

      use of a winding-up institution, as has already taken place, in accordance with paragraph 6.