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EC not ready to approve ING Alt-A deal -report

Source: Reuters - Tue 15th Sep 2009

European Commission competition authorities are not ready to approve a 22 billion euro ($32 billion) loan portfolio guarantee between ING and the Dutch state, newspaper De Volkskrant reported on Tuesday.

The paper said if the Dutch finance minister, Wouter Bos,was unable to win approval from the Commission in the next six months, ING may be forced to take a bigger hit on the deal.

In January, ING and the state struck a deal for the government to guarantee 80 percent of a 27.7 billion europort folio of so-called Alt-A and subprime residential mortgage backed securities.

The government is due to receive 80 percent of the cash generated from the portfolio, which it took on at a 10 percent discount to par value.

The EC gave the deal six-month approval in March while it conducted an investigation. An EC spokesman said a decision wasdue Tuesday, but declined to comment further.

An ING spokesman declined to comment. The Dutch finance ministry was not available to comment.

De Volkskrant reported that European Competition Commissioner Neelie Kroes believed the state was too generous with the deal, but intended to give the finance ministry another six months to prove its case.($1 = 0.6833 euro)

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