(Corrects to bank will repay state aid as soon as possible and not as soon as markets allow, paragraph 5)
FRANKFURT, July 25 (Reuters) - 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 further said.
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 demand. (Reporting by Arno Schuetze, editing by Edward Taylor)