HSH Nordbank €5 billion NPL sale

Overview:

• HSH Nordbank has raised €2.4 billion after transferring a €5 billion non-performing loan (NPL) portfolio to hsh portfoliomanagement AöR, an SPV established by the German states which own the regional lender having bailed it out after the financial crisis.
• The transaction forms part of a restructuring plan agreed between HSH, which is in danger of being wound down, its majority owners - states Hamburg and Schleswig-Holstein - and the EU. 
• Under the restructuring plan, the bank will be divided into a holding and an operating company, then sold.
• The EU agreed the bank can sell up to €6.2 billion in NPLs to its two state-owners and an additional $2 billion on the open market.    
• Although the NPL portfolio was sold at market rate - a significant loss on the ordinal loans value - it should make it easier to find a buyer for HSH.
• The EU has said HSH has until February 2018 to find a buyer (an additional six-month extension may be possible) or it will be wound down.  
• Much of HSH's problems stem from its strong focus on shipping; as the industry suffered heavy loses following the financial crisis so has the bank, leaving it unprofitable.  
• JPMorgan Chase is financing the acquisition. 
• Linklaters (Andreas Steck, Jan Endler, Thomas Niessen, Mario Pofahl, Marc Trinkaus) acted for Hamburg and Schleswig-Holstein.
• Freshfields Bruckhaus Deringer (Patrick Cichy, Marius Berenbrok, Torsten Schreier, Christoph Gleske, Michael Josenhans) advised HSH Nordbank.
• Clifford Chance (Bettina Steinhauer, Barbara Mayer-Trautmann, Marc Benzler, Oliver Kronat, Joachim Schütze, Felix Mühlhäuser, Frank Scholderer, David Elshorst) represented JPMorgan.

Ben Naylor - EMEA Editor