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Leveraged Acquisition Finance (LAF)<br />
Overall portfolio<br />
As of Sept. 2010<br />
Exposure at Default<br />
in € bn<br />
Regions<br />
50%<br />
13%<br />
6%<br />
4%<br />
Germany<br />
UK<br />
USA<br />
France<br />
€3.8bn<br />
Eric Strutz CFO <br />
Frankfurt <br />
November 8th, 2010<br />
4%<br />
4%<br />
4%<br />
14%<br />
The Netherlands<br />
Luxemburg<br />
Italy<br />
Others<br />
Portfolio details *<br />
In Q1-Q3 2010 the portfolio was characterized by prepayments<br />
and amendments of existing transactions as well as by the<br />
funding of new transactions.<br />
The LAF market has gathered momentum; it confirms the<br />
expected process of normalization of this market-segment.<br />
Total LAF exposure slightly reduced to €3.8bn; minor<br />
provisions were established in the second and third quarter.<br />
Main exposure (~ €3.5bn) managed by C&M, only €244m by<br />
MSB (with 99% of the exposure in Germany).<br />
Outlook:<br />
Due to their high leverage most companies in the portfolio are<br />
more susceptible to the economic environment than other<br />
corporates across the Bank.<br />
Particularly lagging business cycle sectors may experience<br />
difficulties in the current stage in the economic cycle if their<br />
liquidity position becomes strained. We cannot rule out<br />
additional P&L impacts from rating downgrades and/or defaults<br />
even if the economic rebound stabilizes.<br />
New business still requires conservative structures and limited<br />
underwriting risks.<br />
* excluding default portfolio<br />
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