Hamburg-based banking company Joh. Berenberg, Gossler & Co. (Berenberg Bank) has secured some USD 500 million in private equity funding which would be invested in shipping loans, Bloomberg reports.
At the end of June, the bank entered a memorandum of understanding with an undisclosed international investment company, to support some 400 shipping firms.
Berenberg’s head of shipping, Philipp Wuenschmann, told Bloomberg that the parties would support the shipping sector after a number of Germany’s biggest ship financiers turned their backs on new loans due to a financial crisis in the industry.
Under the agreement, the parties would offer unitranche debts, which combine combine senior and subordinated debt into one debt instrument, increasing the loan-to-value ratio to 70 percent compared with about 40 percent on single loans.
Just last week, Germany’s provider of shipping finance HSH Nordbank transferred a portfolio of non-performing loans from ship financing with a volume of EUR 5 billion (USD 5.5 billion) to hsh portfolio-management AöR of majority owners Hamburg and Schleswig-Holstein effective June 30.
With this move, HSH Nordbank is reducing its troubled assets, in line with the recently completed EU state aid proceedings, and, according to CEO of HSH Nordbank AG, Stefan Ermisch, the bank is “now spinning off around 50 percent” of its non-performing shipping loans.
HSH Nordbank is planning to sell further non-performing loans with a volume of EUR 3.2 billion dating from the period before 2009, this time from the shipping, real estate, aviation finance and renewable energies segments, on the market by mid-2017 with hedging from the guarantee.
In April, the country’s shipping bank Norddeutsche Landesbank (Nord/LB) said that it plans to cut its shipping loans by some EUR 5 to 7 billion (USD 5.6 to 7.9 billion) due to the current slowdown in the shipping market.
The bank aimed at reducing the shipping portfolio from its current volume of EUR 19 billion by outsourcing risks and targeted reduction to a future volume of some EUR 12 to 14 billion.