annual report - Hypo Real Estate Holding AG

Structured Asset Finance (SAF)
DEPFA continued to build its Structured Asset Finance
operation focusing on the Iberian Peninsula and
Southern Europe. The mandate of the team is to
identify, structure and monetize the cash flows of
public sector assets.
The focus of the team is on bilateral transactions where
increased value added can be produced. The team
has been particularly active in offering bespoke solutions
to Italian public sector health care providers. Also of
significance was the team’s activity in supporting the
capital funding requirements of government related institutions,
in particular the Energinet finance deal as
profiled in this report.
Strong asset growth was recorded over 2007; how -
ever, quarter four activity was restricted by the market
turbulence. With a solid pipeline in place the team is
well placed to deliver a strong performance in 2008,
where two of the main areas of focus will be consolidation
in the new markets entered, and on bespoke
bilateral transactions.
Guaranteed Investment Contracts (GIC)
This product is unique to the US market and allows
municipal issuers a flexible way to invest proceeds
raised from bond issues. As the GIC provider, DEPFA
gains an attractive additional source of funding. Additionally,
as this product is principally focused on the
municipal market, it provides DEPFA with increased
access to new public sector clients.
The team was enlarged at the beginning of 2007 and
this translated immediately into an increased level of
mandates being won. The contribution in 2007 was
impressive with the desk winning almost US$8.5 billion
in new funds from 127 municipal clients and delivering
substantial savings to the Bank’s cost of funding.
Pension Finance (PF)
2007 was the first full year of operation for the Pension
Finance team. The team’s mandate is to advise
DEPFA’s clients on the impact of policy choices on the
funding costs and affordability of pension and other
social benefits and provides alternatives in the area of
structuring, financing and investing reserves for clients.
The planning and analysis is carried out using proprietary
quantitative models with the results used as a starting
point for determining a long-term financial plan for
the sustainability of social benefits.
With a firm pipeline of transactions in place, 2008 is expected
to be a key year for the PF team, particularly in
the US market where the combination of the specialist
PF product knowledge, combined with DEPFA First Albany’s
public sector origination network will provide
good opportunities.
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