Vestia reaches deal with banks to freeze interest rates
Wednesday 30 May 2012
Troubled Rotterdam housing corporation Vestia has reached a deal with its banks to stave off bankruptcy by freezing interest rates, Nos television reports.
Under the terms of the deal, the banks have agreed to freeze interest rates at current levels and will not slap any more financial conditions on the company, Nos said.
Vestia got into trouble after investing in complicated financial products to protect it against interest rate increases. But the fall in interest rates means the housing corporation now owes a total of 11 banks over €2.6bn. The corporation has given the banks guarantees covering €1.2bn of its debt.
The corporation has some 90,000 houses. Its financial chief was arrested earlier this month on charges involving bribery and money laundering.