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Depfa Bank Bonds Fall Most Since 2011 as Germany Scraps Sale

Bonds sold by the Depfa Bank subsidiary of bailed-out lender Hypo Real Estate AG fell by the most in almost three years after Germany’s government scrapped plans to sell the unit and opted to wind it down instead.

Depfa’s 5 percent perpetual Tier 1 securities, with 500 million euros ($686 million) outstanding, fell 21 percent since the May 13 decision to keep the bank, the biggest monthly drop since September 2011. The Dublin-based unit’s 400 million euros of 6.5 percent Tier 1 bonds fell 16 percent while a 300 million-euro issue of similar securities slid more than 20 percent. The bonds are trading at close to 50 cents in the euro.