The German insurance supervisor BaFin has updated the direction[1] for investments in corporate loans. In addition to checking the debtor’s creditability according to the guidelines of the German Insurance Society (GDV-“Kreditleitfaden”) or with reference to a long term rating of a recognised agency the assessment of the collateral of a loan is mandatory.

From experience front-ranking mortgages or pledgeable receivables/securities are not available as collateral. Therefore the outstanding status of a borrower[2] needs alternatively to be proven as a result of evaluating the company’s financial statements. This is assumed if certain requirements are met.

Further details can be obtained on request.