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Germany extends guarantee terms for HRE bank

  Germany’s Financial Markets Stabilization Fund has extended until mid-August the maturity of state guarantees for stricken real estate lender Hypo Real Estate, the bank said in a statement on Tuesday.

The German government has issued a total of €52 billion ($68.66 billion) in guarantees to help Hypo Real Estate remain afloat. The guarantees were made in three tranches with different expiry dates.

Because a €30 billion tranche was due to expire on April 15, 2009, the German Financial Markets Stabilization fund, known as SoFFin, extended the guarantee until Aug. 19, 2009. The terms of the remaining €22 billion in guarantees have also been extended to Aug. 19 “to facilitate uniform handling”, Hypo Real Estate said.

The amount of the guarantees remain unchanged. Hypo Real Estate Bank AG will bay to Soffin a pro-rata commitment commission of 0.1% on the undrawn portion of the framework guarantee, and a 0.5% fee on guarantees drawn upon.

The guarantees enable Hypo Real Estate to collateralize debt securities to be issued. (Reuters)