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Investor Presentation July 2020 EAA at a Glance German Federal - - PowerPoint PPT Presentation
Investor Presentation July 2020 EAA at a Glance German Federal - - PowerPoint PPT Presentation
Investor Presentation July 2020 EAA at a Glance German Federal Wind-down Agency established by the FMSA EAAs stakeholders are irrevocably obligated to offset all losses without undue delay Public mandate based on the legislation on
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Legal Statement
▲ Agency under Federal Law
EAA is a structurally and financially independent public law agency with partial legal capacity
- perating under the umbrella of the Federal Agency for Financial Market Stabilisation (FMSA).
EAA was established by the FMSA as a Federal Winding-up Agency in accordance with Article 8a of the Stabilisation Fund Act (StFG; formerly known as FMStFG).
▲ Not defined as a bank
EAA is not a credit institution as defined by the German Banking Act (KWG) nor does it conduct business that requires license pursuant to EU Directive 2006/48/EC. EAA is supervised by the German Federal Financial Supervisory Authority (BaFin) only with respect to applicable regulations according to KWG
▲ Funding restriction
As a consequence of the non-bank status EAA‘s funding is achieved solely by Institutional Investors, hence not by receiving deposits or other repayable funds from the public.
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Legal Framework
FMS („SoFFin“) Financial Market Stabilisation Fund FMSA Federal Agency for Financial Market Stabilisation
Erste Abwicklungsanstalt (‘First Winding-up Agency’)
Winding-up agency under German federal law (StFG 1) Established in December 2009 Portfolio transfer in 2009, 2010 and 2012
1 StFG: Stabilisation Fund Act; formerly known as Financial Market Stabilisation Fund Act FMStFG
EAA‘s public mandate: to stabilise the financial market Winding-up Agency
Referring to StFG1 sec. 8a (1), upon application the FMSA could establish public-law institutions, to which risk positions as well as ‘not strategically required’ business divisions could be transferred for the purpose of liquidation. EAA has been established by the FMSA on application by WestLB to assume a portfolio of risk positions and non-strategic businesses for the purpose of winding- up these positions.
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Business Volume
as of 31.12.2019
▲ Asset transfer and accounting in accordance with German Commercial Code (HGB) ▲ Total assets according to HGB are 37.8 bn EUR. ▲ Including contingent liabilities of approx. 1.8 bn EUR and other liabilities of approx. 0.2 bn EUR
the total business volume amounts to 39.8 bn EUR.
20 40 60 80 100 120 140 160
Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 2nd Transfer
Portfolio development – business volume in bn EUR
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Portfolio Structure
▲ EAA has assumed a highly diversified portfolio.
A substantial amount of USD-denominated assets instigates generic USD funding .
▲ Approximately 69% of EAA’s assets of the investment book
have investment grade.
▲ The segmentation of EAA’s investment book leads to about
20 clusters by products or industries. A total size of roughly 15.8 bn EUR comprises assets on balance, contingent liabilities and loan commitments as well as a look-trough on exposures held by EAA’s subsidiaries. Together with the trading book’s market value of approx. 15.4 bn EUR, the combined portfolio of EAA adds up to about 31 bn EUR.
▲ EAA’s refinancing relates only to the total assets of the
balance sheet but again these need to be scaled down by the market value of the trading book as these positions are nearly balanced on both sides of EAA’s balance sheet.
Structured Securities; 6,1 Structured Products; 1,3 Real Assets; 2,6 Public Finance & FI; 4,1 Corporates; 0,8 Equity/Mezzanine; 0,1 Loans & advances to banks; 5,7 Loans & advances to customers; 8,3 Cash reserve; 1,8 trading book assets; 15,4 securities; 5,4 investments; 1,1 12,5 3,6 1,5 0,6 10,3 2,6 1,4 0,5 Investment Non-investment Special rating not rated grade grade EMEA Germany Americas APAC
(in bn EUR)
7,1 1,7 9,1 0,3 6,0 1,4 7,3 0,2
- 31. Dez 18
- 31. Dez 19
as of 31.12.2019
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Duty to Offset Losses
Pursuant to StFG 1 sec. 8a para. 4 (1) ff. in conjunction with EAA‘s charter sec. 7 (see: www.aa1.de) Details of the duty to offset losses is regulated in Section 7 of the Charter of EAA. For losses exceeding the agreed proportional liabilities of all stakeholders, the State and the SoFFin will agree upon the apportionment based on the StFG 1. EAA's stakeholders and the SoFFin are obligated to provide EAA with such amounts at such times as are necessary in order to ensure that EAA is always in a position to meet its due liabilities on first demand. The proportional amounts per guarantor are defined by EAA’s charter.
Charter Section 7, para. 1-4 Charter Section 7, para. 5 up to 9.52bn EUR unlimited
EAA
Insolvency-remote by the guarantee mechanism
- n first
demand
Investor
1 StFG: Stabilisation Fund Act; formerly known as Financial Market Stabilisation Fund Act FMStFG
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EAA in the Capital Market
▲ EAA‘s Issuer Credit Ratings are the same as for the State of NRW ▲ EAA‘s risk weighting may be determined alike that of the State of NRW. EAA has been
included on EBA‘s list for public sector entities treated alike their governments.
Moody‘s Aa1 / P1 Standard & Poor's AA / A-1+ Fitch AAA / F1+
▲ Frequent issuance under an EMTN programme
▲ Benchmark-issues: minimum volume of 1 bn EUR or USD, no taps, fixed interest rates ▲ Rating of the Debt Issuance Programme and the notes thereunder by Moody‘s and Fitch
▲ Commercial Paper for liquidity management in EUR, USD, GBP.
▲ ECP and USCP with maturities up to 12 month ▲ Rating of the Global Commercial Paper Programme by Moody‘s, Fitch and Standard & Poor‘s
September 2019: upgrade from AA-
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Issuance
▲ EAA‘s outstanding securities are composed of
transferred bonds issued by the former WestLB and own issuance by EAA.
▲ EAA‘s assumed annual volume of term
funding amounts to an equivalent of 3 bn EUR.
▲ Placements in the capital market (ex CP)
▲ 2018: 1 bn EUR and 2.25 bn USD
▲ 2019: 1 bn EUR and 2.25 bn USD ▲ 2020 (YTD): 1.25 bn USD 3Y MS +10bp
9,0 0,7 0,5 0,2 Tenors outstanding (in bn EUR)
1-3 Y 4-7 Y 8-10 Y > 10 Y 5,4 5,5
Currencies outstanding (in bn)
EUR USD
Official Institutions Asset- managers Banks 70% 10% 20% 10% 30% 60% USD EUR
Average Investor Base
as per 31.03.2020
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Disclaimer and Contact Information
For more information about the EAA please visit our website www.aa1.de Please address questions relating to EAA’s funding to Erste Abwicklungsanstalt Investor Relations / Treasury 0049-211-826 7913 holger.dohra@aa1.de This presentation is intended as information only and does not constitute investment advice or financial analysis, and as such does not comply with legal requirements regarding impartiality of financial analyses. This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public
- ffering of securities to be made in the United States will be made by means of a