EANS-Adhoc: Kommunalkredit Austria AG / Split-up

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ad-hoc disclosure 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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17.11.2009

Kommunalkredit Austria AG expects an agreement on its future
capitalisation to be concluded with the Republic of Austria in the
immediate future. Thus, the surety granted by the Republic of Austria
on 24 April 2009 for certain assets of Kommunalkredit Austria AG in
the amount of EUR 1,207.9 million will be replaced by a three-year
state guarantee for liabilities in the amount of EUR 1 billion
against a debtor warrant on future annual surpluses. Kommunalkredit
Austria AG for its part is obliged to pay, until further notice, a
consideration of 10% per year, i.e. EUR 100 million annually, to the
Republic of Austria for the three-year liability guarantee.

Moreover, a capital injection of approx. EUR 250 million is expected
to be granted by the Republic of Austria to Kommunalkredit Depotbank
AG, a subsidiary of Kommunalkredit Austria AG, in preparation of the
planned spin-off of Kommunalkredit Austria AG´s core banking business
to Kommunalkredit Depotbank AG. The minority shareholder of
Kommunalkredit Austria AG, the Austrian Association of
Municipalities, will make a contribution corresponding to its share
of 0.22%. Possible measures accompanying the capital increase are to
be finally agreed upon with the European Commission.

Against this background, Kommunalkredit Austria AG furthermore
expects that the split-up planned in the course of its restructuring
will be approved at the extraordinary general meeting scheduled for
17 November 2009 and the extraordinary general meeting of its
subsidiary, Kommunalkredit Depotbank AG, to be held on the same day,
by the shareholders of both companies and that, subject to entry in
the Register of Companies and the approval given by the supervisory
authority, the split-up will be implemented.

Implementation of the measures taken has been agreed upon in
principle with the competent units of the European Commission. The
negotiations regarding the required final approval of the entire
restructuring plan by the European Commission are being conducted in
a constructive spirit.

As of the effective date of the split-up, Kommunalkredit Austria´s
core banking business, comprising all strategic assets in the
municipal and infrastructure-related segments as well as the
corresponding new business, will be spun off to Kommunalkredit
Depotbank AG. The future official name of Kommunalkredit Depotbank AG
will be Kommunalkredit Austria AG. The other, non-strategic assets
and liabilities, including the securities portfolio and
Kommunalkredit Austria AG´s holding in Kommunalkredit International
Bank Ltd (Cyprus), remain with Kommunalkredit Austria AG, the future
official name of which will be KA Finanz AG. After the split-up, the
total assets of KA Finanz AG according to the new Austrian Company
Code will amount to approx. EUR 17.5 billion, while the total assets
of Kommunalkredit Depotbank AG (in future: Kommunalkredit Austria
AG), including the capital injection, will total about EUR 16.2
billion.

In the course of the split-up, the holders of supplementary capital
and participation capital of Kommunalkredit Austria AG will be
granted equivalent rights pursuant to Sect. 15, sub-sect. 5, of the
Austrian De-Merger Act in that existing issues remain with KA Finanz
AG with their nominal value reduced to 75.83% of the original value,
and Kommunalkredit Depotbank AG (in future: Kommunalkredit Austria
AG) grants the holders corresponding instruments with identical terms
and conditions for a nominal value of 24.17% of the original amount.
This division corresponds to the ratio of the risk-weighted assets of
the two companies after the split-up, as determined for the purposes
of capital adequacy. From today´s point of view, it must be assumed
that in the foreseeable future no coupon payments will be made on the
supplementary capital and the participation capital remaining with KA
Finanz AG. However, the Executive Board expects that, in principle,
coupon payments on such instruments at Kommunalkredit Depotbank AG
(in future: Kommunalkredit Austria AG) should be possible, assuming
that the bank´s business develops as forecast. Moreover, the loss
participation of participation capital, based on the accounting rules
of the new Austrian Company Code, as already disclosed in the ad-hoc
notification of 26 August 2009, is to be noted.

Further information: german version
http://www.kommunalkredit.at/DE/Kommunalkredit/Presse/Pressetexte

Language: German, English

Emittent:
Kommunalkredit Austria AG
Tuerkenstrasse 9
1092 Vienna
Austria
Phone: +43/1/31 6 31-640
Mail: investorrelations@kommunalkredit.at
Internet: www.kommunalkredit.at

ISIN:
XS0285503248, XS0252707624, DE000A0DHT43, XS0270579856, AT0000320890,
AT0000329966, XS0437341307, AT0000329859, AT0000329842, DE0002490505,
XS0431077550, XS0427232409, XS0422281252, AT0000A0D675, XS0416396108,
XS0414763382, CH0022603424, XS0410581614, AT0000329941, AT0000329768,
XS0455437904, XS0455436179, XS0452330656, XS0450912018, XS0385340764,
XS0384064936, XS0373257590, XS0363957530, XS0362591249, XS0361391617,
XS0354530593, XS0354531211, XS0354530916, XS0342083101, XS0340901908,
XS0336932065, XS0316603785, XS0315498765, XS0315418839, XS0304532392,
XS0302365134, XS0299062389, XS0289015777, XS0286975973, XS0286872576,
XS0286031777, XS0284919056, XS0285666383, XS0279423775, XS0275587987,
XS0275587987, XS0271821513, XS0270872640, XS0267998481, XS0267751245,
XS0266826659, XS0261832942, XS0260020366, XS0257275098, XS0255439803,
CH0025662831, CH0025662831, CH0025662831, XS0253410236, XS0252863245,
XS0252786669, XS0252593198, DE000A0GPU96, XS0245717854, XS0245191555,
XS0244843511, XS0243521530, XS0242204609, XS0242018645, XS0241451581,
CH0024015452, XS0236776877, XS0235597068, CH0022654518, CH0022654518,
CH0022654518, XS0227404661, CH0022280058, XS0222702655, XS0219327524,
XS0218834843, XS0218885670, XS0218885910, XS0218474533, XS0215839019,
XS0215865287, XS0216184621, XS0215246546, XS0214981812, XS0214564972,
XS0213831471, XS0213830820, XS0213696916, XS0213230047, XS0212932700,
CH0020669583, CH0020669583, XS0212122534, XS0211496590, XS0210167218,
CH0020208473, CH0020208473, CH0020208473, XS0205974701, XS0200950599,
XS0197387953, XS0187975262, XS0186736228, AT0000441209, XS0185015541,
CH0017447787, CH0017447787, XS0180539420, XS0176120268, XS0172076365,
CH0016143015, XS0166801174, XS0165196261, XS0163624504, XS0160668181,
XS0144772927, XS0140045302, XS0137435334, DE0004530902, DE0004530902,
XS0107642547, XS0107642547, XS0104786263, AT0000320858, XS0100920353,
AT0000320833, XS0095210034, XS0095210034

Stock Exchanges: Vienna, Luxembourg, Amsterdam, Frankfurt,
Zürich

Emittent: Kommunalkredit Austria AG

end of announcement euro adhoc
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ots Originaltext: Kommunalkredit Austria AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Kommunalkredit Austria AG

Treasury - Financial Markets

Thomas Fendrich

1092 Wien, Türkenstraße 9

Tel. ++43(0)1/31631-640

Fax: ++43(0)1/31631-505 oder/or 99640

Mail: t.fendrich@kommunalkredit.at

Branche: Banking
ISIN:
WKN:
Börsen: Wien / stock market