Hypo Real Estate Holding has started a tender process for subsidiary Deutsche Pfandbriefbank (pbb) in parallel with preparing an initial public offering as an alternative means of disposal, with the re-privatisation of the Pfandbrief issuer a part of a 2011 EC state aid agreement.

The HRE group, which is owned by the German government following its bail-out during the financial crisis, announced the initiation of the tender process yesterday (Tuesday) alongside pbb’s 2014 results.

“We are embarking upon re-privatisation, against the background of a very positive performance over recent years, solid results for 2014, and an outstanding position on the credit and capital markets,” said Andreas Arndt, co-CEO and chief financial officer of pbb.

Citigroup and Deutsche Bank have been appointed financial advisors for the sales process.