GermanyâÂÂs Dresdner Bank is planning to provide capital support to its ailing structured investment vehicle K2 before quitting the SIV business entirely, in the latest of a series of bailouts sponsor banks have engaged in to avoid asset firesales and placate senior debt investors.
In a statement today the bank, which is owned by German insurer Allianz, said it would provide the $18.8bn (â¬12.7bn) K2 vehicle with an undisclosed amount of capital through a credit facility or loan, which should ensure the repayment of all senior debt issued by the vehicle.
