Nov. 12 (Bloomberg) -- Hypo Real Estate Holding AG, the German property lender bailed out last month, said it will seek additional rescue funds after a bigger-than-estimated third- quarter loss on goodwill writedowns for Depfa Bank Plc.

The company fell 12 percent in Frankfurt trading after reporting a pretax loss of 3.1 billion euros ($3.9 billion), including 2.5 billion euros of markdowns on Depfa. The loss exceeded the median estimate of 2.39 billion euros of 10 analysts surveyed by Bloomberg.

Hypo Real Estate was forced to seek a 50 billion-euro lifeline on Oct. 5 in Germany's biggest bailout since World War II when Depfa failed to get short-term funding amid the credit crunch. The Munich-based lender will apply to Germany's bank rescue fund for additional liquidity and ``any significant capital requirements,'' it said today.

``The numbers are devastating, and the outlook is gloomy as the bailout's costs will burden future profits,'' said Philipp Haessler, an analyst at Equinet AG in Frankfurt who has a ``sell'' rating on the shares.

The stock dropped 46 cents to 3.46 euros in Frankfurt. They lost 90 percent since the beginning of the year, valuing the company at 730 million euros.

Hypo Real Estate paid about 5.3 billion euros in July 2007 to acquire Dublin-based Depfa, which specializes in government lending and depends on money markets for funding. Credit markets froze up after the bankruptcy of Lehman Brothers Holdings Inc. in September.

Rescue Funds

Hypo Real Estate also expects 600 million euros of writedowns related to the collapse of Lehman, an investment in Babcock & Brown Ltd., investments in Iceland and losses related to collateralized debt obligations. Hypo Real Estate also took charges of about 100 million euros ``in view of the deterioration of the real estate markets.''

The German lender also said today that negotiations for the 50 billion-euro loan facility, partially guaranteed by the German government, have been completed. The funds will be made available starting Nov. 13. The company said on Oct. 30 that it received an additional 15 billion-euro guarantee to cover short-term cash requirements from Germany's Financial Markets Stabilization Fund.

``For the fourth quarter, Hypo Real Estate Group expects that results will be negatively affected as a result of the costs of the agreed liquidity facility,'' the company said in the statement. ``Overall, the market environment remains difficult. The costs of the 50 billion-euro liquidity facility and the restructuring will also impact on results for 2009.''

`Capital Injection'

Hypo Real Estate is providing collateral of 60 billion euros in loans and securities to secure the liquidity facility, which has a term maturing on Dec. 31, 2009, subject to an extension of the federal guarantee beyond March 31, the statement said.

The company had a core capital ratio, a key indicator of financial strength, of 6.8 percent on Sept. 30, down from 8.2 percent on June 30, it said.

``The third-quarter Tier-1 ratio is too low, in our view,'' said Kerstin Vitvar, a Munich-based analyst at UniCredit SpA who recommends investors sell the stock, in a note to clients today. ``Therefore, a high capital injection is very probable,''

Hypo Real Estate postponed the release of its complete interim report to Nov. 17 from today.

Axel Wieandt, formerly head of corporate development and corporate investments at Deutsche Bank AG, replaced Georg Funke as Hypo Real Estate's chief executive officer on Oct. 7. Kai Wilhelm Franzmeyer joined from Commerzbank AG to oversee group treasury. Kurt Viermetz quit as supervisory board chairman on Oct. 10 and was replaced ``temporarily'' by deputy chairman Klaus Pohle.

To contact the reporters on this story: Cathy Chan in Hong Kong at kchan14@bloomberg.netOliver Suess in Munich at osuess@bloomberg.net

Last Updated: November 12, 2008 12:06 EST