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Two ING RE funds redeem auction-rate stock

ING Real Estate’s real estate equity management arm is the latest to redeem securities to help ease shareholders’ liquidity pains.

ING Clarion Real Estate Securities, the real estate equity management arm of ING Real Estate, announced Thursday it plans to partially redeem auction-rate preferred securities for two of its closed-end funds.

The partial redemption will come in the amount of $200 million (€130 million) and $40 million respectively, which represents 22 percent and 33 percent respectively of the total ARPS outstanding for each fund. The redemption will be funded with cash on hand and debt borrowings available under existing credit lines, according to ING.

ING is only the latest investment manager redeeming some securities to help ease the pain of the liquidity crisis faced by their shareholders. On Wednesday Nuveen Investments announced it has arranged new debt financing, and on Monday Eaton Vance said would redeem the outstanding auction-rate preferred shares of three taxable closed-end equity funds. On Friday Aberdeen Asset Management said it would redeem $30 million of outstanding auction-rate preferred securities, replacing them with loans.

ING said it will continue to work with banks, advisors and other industry participants to seek additional avenues for enhancing liquidity and reducing costs of leverage consistent with the investment objectives of the funds, and considering the concerns and interest of all shareholders.

The firm's real estate acquisitions are still bristling along. Also Thursday, the firm revealed at the MIPIM conference in Cannes that it has solda development it invested €100 million in, Alcala Magna shopping center in Madrid, to its own fund, the ING Retail Property Partnership Southern Europe Fund, for €130 million.