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The municipality of Marl has mandated WestLB AG to take over the professional management of its debt portfolio amounting to € 120 million. Many municipalities in North Rhine-Westphalia have already decided to take up WestLB AG´s innovative offer, for example Bottrop and Remscheid. Further mandates are also in the pipeline which will bring significant interest advantages for the municipalities through the use of derivatives.

WestLB´s excellent track record and the outstanding cooperation with Sparkasse Vest Recklinghausen played a crucial role in the acquisition. WestLB´s new strategic direction involving a stronger focus on regional clients and close cooperation with the savings banks underlines the promising future prospects for this business segment.

Municipal spending is rising, but important sources of revenue such as, for example, trade tax are on the decline. Many municipalities have been suffering from these financial difficulties for years now, and there is no sign of a trend turnaround. Municipal debt is increasing in tandem with the deficits. According to figures published by the Federal Statistical Office, at the beginning of this year the municipalities had accumulated debts of more than € 83 billion. The resulting interest charges are enormous. In 2002 the municipalities were faced with an interest bill in excess of € 5 billion.

WestLB offers German municipalities active debt portfolio management which is tailored specifically to their existing loan agreements and, above all, to finding the most favourable interest rates. With the help of state-of-the-art derivative instruments such as swaps, caps and structured products, WestLB´s specialists are able to reduce interest charges in the municipal budgets considerably.