NordLB Seeks to Draw Asia Private Equity Funds to Shipping Loans
Time：2015-01-09
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The 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 in an interview in Hanover, Germany today.
“In Asia, they are not talking about a shipping crisis,” Buerkle said. “In Asia, you have investors that put their money in ships, as they believe that the slump is so deep now that it offers good opportunities,” he said on the sidelines of a press briefing at the NordLB headquarters. Buerkle declined to name the investors or the value of the transactions.
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NordLB, which along with the other German marine lenders HSH Nordbank AG and Commerzbank AG (CBK) passed the European Central Bank’s health check last October, is trying to eliminate bad loans amid a slump in the container-vessel market. The bank provided 17.3 billion euros ($20.5 billion euros) in loans to 1,582 vessels at the end of September, according to its interim report.
Pulling together “sustainable packages” of vessels enables the bank and the external investor to make use of cross-collateralization when the collateral for one shipping loan is used as collateral for another, said Buerkle.
“There are good ships, that earn their charter, and there are bad vessels and the aim is to use the proceeds from the good ones to cover for the shortfalls of the bad ones,” he said. “With these platforms the bank may need to prolong its financing for a vessel, but then you have a sustainable structure,” said the board member.
NordLB’s total non-performing loan ratio increased to 3.9 percent at the end of September from 3.7 percent at the end of 2013, according to its interim report. It plans to dispose of its non-performing ship loans by 2019, Oliver Faak, NordLB head of ship finance said at the Hansa ship finance forum in Hamburg in November.