The German shipping bank Norddeutsche Landesbank (Nord/LB) has reached an agreement with KKR Credit to sell a portfolio of performing and non-performing shipping loans with a total volume of about USD 1.5 billion originated by NORD/LB.
The deal, which is subject to completion of certain conditions precedents, would include up to 100 ships and would form the seed mandate for a shipping portfolio management company that the investors would create simultaneously with the closing of this sale.
This company is designed to be open for use by third party banks for their portfolio management.
NORD/LB said that the sale is expected to close in the fourth quarter of 2016 and is expected to be structured as a securitisation with NORD/LB and the investors both acting as initial investors therein. The parties have agreed not to disclose the terms.
“The agreement reached with the investors is a significant milestone for the bank as it continues to effectively manage its balance sheet through the ongoing shipping crisis,” Gunter Dunkel, chairman of the Management Board of NORD/LB said.
Dunkel added that, when the transaction closes, it would contribute to reducing the bank’s overall ship loan exposure from EUR 18 billion (USD 20.3 billion) to EUR 12 to EUR 14 billion.