Erste Abwicklungsanstalt

Public policy role in facilitating the workout of the former WestLB AG and winding up of all transferred risk positions. Integral link to the German State of North Rhine-Westphalia because of the ownership structure and state support mechanism. Business limits as a nonbank workout entity. No internal capital generation capacity and depletion of the existing capital base to a low level due to loss accumulation. Reliance on government support to close capital, funding, and liquidity gaps in case of need. S&P Global Ratings' positive outlook on Erste Abwicklungsanstalt (EAA) reflects that we do not expect the ownership structure or strong commitment of the German State of North Rhine-Westphalia (NRW; AA-/Positive/A-1+) to the entity to change in the next two years.

...Strengths: Weaknesses: + Public policy role in facilitating the workout of the former WestLB AG and winding up of all transferred risk positions. + Integral link to the German State of North Rhine-Westphalia because of the ownership structure and state support mechanism. + Business limits as a nonbank workout entity. + No internal capital generation capacity and depletion of the existing capital base to a low level due to loss accumulation. + Reliance on government support to close capital, funding, and liquidity gaps in case of need. Outlook S&P Global Ratings' positive outlook on Erste Abwicklungsanstalt (EAA) reflects that we do not expect the ownership structure or strong commitment of the German State of North Rhine-Westphalia (NRW; ##-/Positive/A-1+) to the entity to change in the next two years. The outlook also reflects our current view that regulatory resolution regimes related to credit institutions in the EU will not hinder the NRW government from providing timely support to...

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