Hypo Real Estate gets 15 billion euro guarantee

Hypo Real Estate Holding AG said the German government approved its request for a 15 billion euro ($19.6 billion) credit line, meant to guarantee its debt until it receives a larger bailout in a few weeks.

The troubled commercial property lender said in a statement late Thursday night that the request had been granted by the country's financial sector rescue fund.

The credit line is a guarantee on the company's short-term lending activity, which is strained by the credit crunch, and aims to support Hypo until it gets more rescue funds agreed in early October.

"The guarantee will cover a bank bond which Hypo Real Estate Group can pledge to draw on a special 15 billion euro liquidity support facility" from Germany's central bank, the company said.

Under the earlier agreement, Hypo Real Estate received a rescue package of credit guarantees worth 50 billion euros ($65.3 billion). The company said "the full extent" of those liquidity facilities should be available by mid-November.

Hypo Real Estate made its application to the wider government rescue fund on Wednesday — becoming the first privately held company to do so. It indicated that it may also seek a capital injection under that plan, which is worth up to 500 billion euros ($653 billion).

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