Transactions with Dutch State
Core Tier 1 securities issued to Dutch State
ING announced on 19 October 2008 that it had reached an agreement with the Dutch government to strengthen its capital position, creating a strong buffer to navigate the market and economic environment. ING issued non-voting core Tier 1 securities for a total consideration of EUR 10 billion to the Dutch State.
In December 2009, ING repurchased the first half of the core Tier 1 securities of EUR 5 billion plus a total premium of EUR 605 million. Furthermore, on 13 May 2011, ING exercised its option for early repurchase of EUR 2 billion. The total payment in May 2011 amounted to EUR 3 billion and included a 50% repurchase premium.
- ING press release ING to strengthen core capital by EUR 10 billion, 19 October 2008
- Term sheet Core tier 1 securities, 19 October 2008
- DNB press release 19 October 2008
- Press presentation ING strengthens core capital, 20 October 2008
- Analyst presentation ING strengthens core capital, 20 October 2008
- ING press release ING to launch rights issue to repay half of State capital injection, 26 October 2009
- ING press release ING to repay Dutch State EUR 5 bn Core Tier 1 securities on 21 Dec., 11 December 2009
- ING press release ING completes rights issue and State repayment, 21 December 2009
- ING press release ING to repurchase EUR 2 bn core Tier 1 securities from Dutch State on 13 May, 7 March 2011
- ING press release ING pays EUR 3 billion to Dutch State for second tranche of core Tier 1 securities, including a 50% premium, 13 May 2011
Illiquid Assets Back-up Facility
ING and the Dutch government reached an agreement on 26 January, 2009 for an Illiquid Assets Back-up Facility (IABF) covering 80% of ING’s Alt-A mortgage securities. Market prices for these securities have become depressed as liquidity dried up, which had an impact on ING’s results and equity far in excess of reasonably expected credit losses. The transaction will significantly reduce the uncertainty regarding the impact on ING of any future losses in the portfolio.
In connection with the sale of ING Direct USA, which closed in February 2012, ING reached an agreement with the Dutch State to adjust the structure of the IABF. The amendment served to delink the IABF from ING Direct USA by putting ING Bank in its place as counter party for the Dutch State. Under the original agreement 80% of the Alt-A mortgage securities of ING Direct and ING Insurance Americas were covered. Only the part covering ING Direct USA, which covered approximately 85% of the total portfolio was adjusted. The ING Insurance Americas part of the IABF remained unaltered.
In order to ensure continued alignment between the interests of ING and the Dutch State with regard to the Alt-A portfolio, ING will provide a counter guarantee to the Dutch State covering 25% of the 80% part of the Dutch State.
