The Netherlands’ biggest housing corporation is in financial difficulty after speculating on the financial markets on interest rates, the Financieele Dagblad reports.
Rotterdam-based Vestia, which manages 89,000 homes, is several billion euros in debt and the banks are demanding extra security on their loans, the paper says, quoting corporation and home affairs ministry sources.
A spokesman for the ministry has confirmed talks are taking place with Vestia but declined to go into details, the paper said. Sources say Vestia has already had several bail-outs from a special government fund.
The problem has arisen because Vestia has invested in financial products where it currently earns less than the interest it has to pay on bank loans. The corporation has borrowed millions of euros to pay for future development products.
If the value of the derivatives rise, the shortfall will be covered, the paper points out.
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