Nordlb News

German lender Norddeutsche Landesbank (Nord/LB) has completed the sale of a EUR 2.6 billion (USD2.9bln) shipping loan portfolio. The bank recently announced its withdrawal from shipping.A US hedge fund Cerberus Capital Management took over the portfolio, which comprises of the 263-vessel book - known as "Big Ben" -  with a non-performing loan (NPL) portion of some 90%.The transaction was closed on 9 April, in accordance with the signing of the purchase agreement dated February 2019, the German bank said. The bidding process was launched in autumn 2018 as part of the bank’s transformation program.The parties agreed to maintain confidentiality about the terms of the transaction…

A growing number of hedge funds are moving into shipping debt, an asset class few have invested in before, looking to buy up loans and bonds as banks cut their exposure to the troubled sector.World economy worries and cost pressures are dampening prospects for a proper recovery in many segments of the shipping sector, which has struggled with tough markets for a decade.Meanwhile European banks, particularly German lenders, are trying to offload distressed and performing loans…

Germany's HSH Nordbank, once the world's biggest ship financier, aims to buy shipping loans from other banks and make new investments in the industry as it emerges from years of turmoil, a top bank official said.The bank's regional government owners are selling the lender to buyout groups Cerberus Capital Management and J.C. Flowers, with investors GoldenTree, Centaurus Capital and Austrian bank BAWAG also taking stakes."HSH, at the end of this process of privatization, will for the first time since 2008 be restored.

German lender NordLB has abandoned efforts to sell a 1.3 billion euro ($1.5 billion) portfolio of shipping loans to KKR, Handelsblatt reported on Monday, citing a spokesman for NordLB. NordLB had said in April it hoped to complete a deal by the end of June. Neither NordLB nor KKR were immediately available for comment. (Reporting by Maria Sheahan)

German state-controlled lender NordLB will inject money into its loss-making Bremer Landesbank (BLB) unit, which is suffering from a weak shipping market that is chipping away at its capital. BLB said it booked a writedown of 1.6 billion euros ($1.71 billion) on its shipping book in 2016. NordLB said that it would, however, not need to tap its own public-sector shareholders to stump up the money for the cash injection. NordLB has said in the past that it expects a 2016 loss of more than 1 billion euros. BLB, which has around 30 billion euros in assets, was taken over completely by NordLB in January. (Reporting by Arno Schuetze)

German banks are still struggling with bad loans from exposure to the shipping industry, reports DW. The banks are struggling to recoup tens of billions of dollars of loans as a global shipping industry slump hits them hard. A report published on Sunday by German public broadcaster ARD has suggested that the northern German states of Hamburg and Schleswig-Holstein may have to offer up to 20 billion euros ($21.4 billion) in credit guarantees to prop up banks with bad investments in container shipping. "Many competitors here have hardly any chance against the new mega-shipping companies in Asia," reporter Heinz-Roger Dohms wrote. That's bad news for the banks that underwrite German shipping companies - and German banks maintain around $100 billion in shipping loans…

The global shipping industry will hit a credit crunch if proposed new bank capital rules are implemented in a sector already weighed down by toxic debt, bankers involved say. The Basel Committee of banking supervisors from nearly 30 countries met in Chile last month in an effort to complete the new rules for lenders in the world's major financial centres. It is now trying to pin down the details. While the rules do not target shipping specifically, some of the biggest rises in…

German banks are struggling to recoup tens of billions of dollars of loans as a global shipping industry slump hits them hard. The lenders - among the biggest backers of shipowners over the past 20 years - are behind up to a quarter of the world's $400 billion of outstanding shipping loans, three shipping financiers told Reuters. This would make them collectively more exposed than banks from any other single country in terms of outstanding debt to the sector. These institutions…

German state-owned lender NordLB and KKR Credit said they had reached an agreement by which KKR Credit will acquire a $1.5 billion portfolio of shipping loans from NordLB jointly with an unspecified sovereign wealth fund. The portfolio of performing and non-performing loans will include up to 100 ships and will form the seed mandate for a portfolio management company that the buyers plan to set up. NordLB is one of several German banks seeking to cut its ship loan exposure as the container and dry bulk shipping industries struggle with their worst downturn due to a glut of ships, a faltering global economy and weaker consumer demand.

The European Central Bank has urged German state-owned lender Bremer Landesbank to shore up its capital resources against non-performing loans in shipping, three sources familiar with the matter said. Bremer (BLB) needs another 700 million euros ($800 million) in equity, weekly magazine Focus reported earlier on Saturday, citing talks between the city-state's finance chief and parliamentary leaders. "There are close discussions with the ECB," one of the sources told Reuters. Strengthening BLB's capital is a "matter of intense talks," a second source said. Germany was one of the world's main centres of global ship finance before the 2008 financial crisis, and the five German banks with the closest links to the shipping industry still have around 80 billion euros on loan to the sector.

Norddeutsche Landesbank Girozentrale's (NORD/LB) strategy to reduce its shipping exposures by EUR4bn-6bn over the next three years makes sense, but will likely encounter high execution risks, says Fitch Ratings. Planned disposals, representing up to one-third of the bank's total shipping exposures, are large, but the shipping markets are not yet showing signs of sustainable recovery and there is a risk that disposal markets could become overcrowded. Currently, a number of lenders are attempting to sell ships, including HSH Nordbank AG, which plans to sell up to EUR3.2bn of ships over the next two years. In our view, ship financing, which represents around 10% of NORD/LB's credit volumes, continues to pose the most significant source of risk for the bank.

German state-backed lender NordLB now expects to report a loss in 2016 after non-performing loans in shipping, where it is one of the world's top lenders, helped push it into the red in the first quarter. The results at NordLB, which previously said it expected an earnings decline this year but did not point to a loss, bode ill for German peers HSH, Commerzbank, DVB and KFW, who have also been forced to take writedowns and boost capital buffers against shipping loan portfolios turning bad. "We are expecting NORDLB to close the current year with a negative result," Chief Executive Gunter Dunkel said in a statement on Wednesday. That would be its first full year loss since 2009.

Germany's shipping lenders are preparing for sustained pain as weakening trade and an over-supply of ships show no signs of easing, industry officials said. Europe's biggest economy was one of the world's main centres of global ship finance before the 2008 credit crisis and the five most involved banks still have around 80 billion euros ($88 billion) of loans outstanding to the sector, a difficult exposure to manage given tighter scrutiny from bank regulators. "The structural imbalance from the over-supply of transport capacity and low demand will continue and we don't expect any encouraging upswing as a result," shipping bank DVB Chief Executive Ralf Bedranowsky said on Thursday.

German bank NordLB and two partners have formed a joint venture that will specialise in advising on the restructuring of non-performing ship loans, the state-backed lender said on Monday. The shipping industry has been stuck in a multi-year slump brought about by global economic weakness and overcapacity, weighing heavily on lenders with exposure to the sector, including NordLB, HSH, Commerzbank and state development bank KFW. The venture, Crystal Ocean Advisors, will offer restructuring services for troubled ship financing portfolios but will not take ownership of the assets. NordLB, shipper Offen Group and alternative assets specialist Caplantic will each own a third of the business, NordLB said.

Although the crisis is not over in all segments, Germany's second-largest marine lender, Nord LB, said its shipping loan portfolio turned a corner in the first quarter after several years of hefty losses, says a report in Reuters. The net profit of the company jumped up 70 percent in the first quarter as commission and lending income rose and as a one-off accounting gain boosted results. NordLB witnessed a turnaround in its shipping unit, earning 23 million euros compared to a pretax loss of 72 million euros a year earlier. It was its first profit on shipping since 2012, and the results bode well for rivals like HSH Nordbank and Commerzbank AG which also have large shipping portfolios. NordLB booked net profit of 156 million euros, up from 64 million a year earlier.

The world’s largest financier of ships HSH Nordbank AG wants to move forward in 2015 with the removal of bad shipping loans that racked up during a seven-year glut in the global container fleet, reports Bloomberg. The bank plans several transactions in which external shipping companies to take over ships of HSH-strapped borrowers, said Wolfgang Topp, head of restructuring division of HSH. He expects that the bank will speedily wrap up as many as three transactions with a gross value of 1.5 billion euros this year. Some transactions had failed in 2014, the Hamburg-based ship financer's market forecast didn't work well particularly concerning bulk carriers, differed from that of market participants.

Germany’s second biggest financier of ships Norddeutsche Landesbank (NordLB) is tapping Asian investors and private-equity funds to invest in its shipping loans. According to a report from Bloomberg, Singapore unit of the state-owned lender last year started creating packages of 10 to 20 vessels for private-equity firms to invest in, Thomas Buerkle, board member responsible for risk management at the bank, said. Bloomberg citing Thomas Buerkle, NordLB's board member, as saying Asian investors believe there are good opportunities amid the shipping slump. In Asia, they are not talking about a shipping crisis, he said. He pointed out that Asian investors put their money in ships, as they believe the slump offers good opportunities.

Pension funds, squeezed by low interest rates, are exploring investments in shipping in their hunt for higher returns, hoping to benefit once this industry starts to recover from one of its worst ever downturns. There are signs of a gradual pick-up in world trade and ship values for the first time since the financial crisis. Ship financier NordLB has said the market could see a broad recovery but not before 2016. The industry's revival could deliver double-digit returns for pension funds that decide to add shipping to their so-called alternative assets such as infrastructure, which can make up about 15 percent of a fund. But they need to do their homework.

ECB in discussion with German supervisors; question over treatment of ship loans in health check. Compromise emerging which may involve 'haircut' on loan valuations. The European Central Bank is taking a hard line on the controversial issue of how shipping loans should be valued in a wide-ranging review into the health of the euro zone's banks, several sources familiar with the matter said. The ECB is making sure the euro zone's most important banks have properly valued their assets and have enough capital to withstand future crises so it can begin with a clean sheet when it takes over as their supervisor from Nov 4. In the past, critics said national supervisors overlooked or even tolerated warning signs of potential shortfalls at banks for fear of causing upsets.