The company has said that the transaction is booked and closed in the first quarter of 2009
ING has finalised the transaction with the Dutch government on the previously announced illiquid assets backup facility. The company has said that the transaction is booked and closed in the first quarter of 2009 and has a limited impact on the profit and loss for the quarter.
The European Commission (EC) has temporarily authorised the backup facility. In the next six months the commission will further study the agreement, a procedure of the commission with regard to transactions that possibly constitute state aid. The commission accepts the cash flow swap arrangement and risk transfer between ING and the state. In case the transaction is deemed to be materially in contradiction with the EC rules on state aid, the commission may request changes to the remuneration for the state in the agreement.
ING has said that the illiquid assets backup facility will result in a full risk transfer to the Dutch state on 80% of the Alt-A RMBS portfolio at ING Direct USA and ING Americas at a discount of 10% of par value. The Dutch state will receive 80% of all cash flows from the portfolio. ING will pay a guarantee fee to the state and will receive a funding fee and a management fee.