EANS-Adhoc

KA Finanz AG

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Disclosed inside information pursuant to article 17 Market Abuse Regulation
(MAR) transmitted by euro adhoc with the aim of a Europe-wide distribution.
The issuer is solely responsible for the content of this announcement.
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other
26.04.2017

Supervisory board authorises management board to negotiate a
refinancing facility with governmental ABBAG - first step towards the
potential handing back of banking licence and constitution of the
company as a "run-off company" in accordance with the BaSAG (Austrian
Banking Restructuring and Resolution Act)

Today, the supervisory board of KA Finanz AG (KF) authorised KF's
management board to negotiate with ABBAG -
Abbaumanagementgesellschaft des Bundes (ABBAG), the sole owner of
which is the Republic of Austria, on a refinancing facility that is
to fully replace KF's current refinancing.

A condition of such refinancing by ABBAG would be that KF constitutes
itself as a run-off company in accordance with section 162 of the
Austrian Banking Restructuring and Resolution Act (BaSAG). In this
process, the banking licence of KF would expire. Constituting KF as a
run-off company is subject to the proviso that a number of currently
uncertain conditions will be complied with, in particular approval by
the FMA (the Austrian Financial Market Supervision Agency) and, from
today's perspective, is still uncertain, just as ABBAG's grant of
refinancing to KF.

Being continued as a run-off company would enable KF to create an
efficient and cost-effective structure in a changed regulatory
environment. The regulatory framework and capital requirements for
credit institutions within the EU, which are continuously being
tightened, provide for constraints aiming at active commercial banks
that can be complied with by a run-off bank such as KF only with
difficulty and at higher costs. Upon its reconstitution as a run-off
company, the run-off horizon for KF's portfolio is envisaged to be
shortened as well. Initially, a complete wind-down by 2040 had been
agreed on with the European Commission. As a run-off company, KF
would strive at achieving this objective as early as within ten
years. KF will continue to aim at making use of the market
opportunities and potential impairment reversals arising in the
course of the run-off.

KF is currently obtaining a portion of approximately 59% of its
refinancing from the market without any direct supporting
governmental measures. If the negotiations with ABBAG are successful,
refinancing in the future would be fully provided by ABBAG, which in
turn would obtain the funds required for that purpose from the
Republic of Austria.

Also in case ABBAG undertakes to refinance KF and KF is constituted
as a run-off company, existing bonds, loans and private placements of
KF will continue to be honoured and redeemed at their full nominal
value at their relevant due dates.

ISIN(s): AT0000329859; AT0000441209; XS0140045302;
XS0144772927; XS0185015541; XS0236776877;
XS0257275098; XS0279423775; XS0973424152;
XS1013581274; XS1033673440; XS1270771006;
XS1288050799; XS1288050872; XS1325164132;
XS1331664679; XS1460837732
Stock Exchange(s): Vienna, Luxembourg

Further inquiry note:
KA Finanz AG
Dr. Helmut Urban, CEO
A-1092 Wien, Türkenstraße 9
Phone: ++43(0)1/310 06 06-600

end of announcement euro adhoc
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issuer: KA Finanz AG
Türkenstraße 9
A-1092 Wien
phone: [phone]
FAX: [phone] - 404
mail: [e-mail]
WWW: www.kafinanz.at
sector: Banking
ISIN: -
indexes:
stockmarkets: stock market: Luxembourg Stock Exchange, Wien
language: English