Breaking the bonds

Two real estate financing units of German banks have been in the news recently, for the wrong reasons. Firstly, in December WestLB, which had been hoping to sell Westdeutsche ImmobilienBank (WestImmo), finally rejected a buy-out deal for its subsidiary from US-based private equity group Apollo Global Management rumoured to be worth in the region of EUR 400 mln - but rather less than the EUR 700 mln they had been hoping for. WestLB had originally been ordered to sell the unit by the end of 2011 by the European Commission in return for a EUR 5.4 bln bail-out in October 2008 following the collapse of Lehman Brothers. According to WestLB, it was disagreements over potential liabilities resulting from the sale, the low price and the market situation that had combined as factors precluding the sale. In a press statement, Dietrich Voigtländer, the chairman of WestLB's management board, said: "It was our declared aim to bring the sale negotiations to a conclusion, also with a view to pres