(Corrects to bank will repay state aid as soon as possible and
not as soon as markets allow, paragraph 5)
FRANKFURT, July 25 German property lender Aareal
Bank on Friday said it has shelved plans to sell bonds
designed to shore up capital and pay back state aid, blaming
unfavourable market conditions.
"We have always said that we would only issue additional
Tier 1 (AT1) capital if market conditions are right," the bank
said in a statement.
"That has not been the case at the end of the first half of
the year and uncertainties in markets remain high," the lender
Aareal said it was sufficiently capitalised even without the
planned AT1 bond issuance. Coco bonds are designed to trigger a
recapitalisation of a bank if it hits trouble.
The bank added that it has applied to German bank bailout
fund Soffin to repay a remaining 300 million euros ($400
million) in non-voting capital the government injected into the
bank in the financial crisis. The non-voting capital stake will
be repaid as soon as possible, Aareal said.
In May, Germany's flagship lender raised 3.5 billion euros
in a sale of the securities dubbed contingent capital bonds or
CoCos, while attracting over 25 billion euros of
(Reporting by Arno Schuetze, editing by Edward Taylor)