When it made a strategic decision in August 2020 to pull back from shipping clients in the US and Asia and retrench to key customers in its European core, lender ABN Amro had a choice: preside over the run-off of existing loans over time, or sell the portfolio.
In the end, it would up doing a little bit of both, global shipping head Joep Gorgels explained after his bank's announcement of a $700m sale to French lender Credit Agricole. ABN Amro said the loans were sold near book value.
"Back in August 2020 we made the decision to completely exit the global commodities financing segment, as well as to stop our natural resources, energy, shipping and intermodal activities in the Americas and Asia. We will continue to focus on expanding our European based shipping and intermodal and (renewable) energy product offering from offices [in] Amsterdam, Athens and Oslo," Gorgels said in a message to TradeWinds.
"With regards to pulling back from shipping and intermodal in the USA, there were indeed several options. One of them is letting the loans mature and wait for a natural run-off. Actually we did so the last 11 months with some of the loan book.
"The advantage of this transaction with Credit Agricole is, among others, that we accelerate the wind down of our remaining non-core loan portfolio and we find a good new financial partner for our clients."
On first impressions, that solution appears to be popular with US-based owners, particularly because Credit Agricole is an experienced, active lender rather than, for example, a private-equity house playing on distressed paper.
"Absolutely," said one official with a US-based company. "I would be surprised if private equity looked at it as this portfolio was not distressed. Credit Agricole is a current lender and we have a good relationship with them."
A second owner added: "It landed in good hands."
A Credit Agricole representative in the US told TradeWinds that the bank was not able to comment on the sale prior to its formal closure.
As TradeWinds reported in August 2020, ABN Amro made the pivot under a new strategic plan for a lender that has been one of shipping’s most aggressive and influential over the past decade.
Among the US-based owners with ABN Amro as part of their lending group are names such as Genco Shipping & Trading, Eagle Bulk Shipping, Diamond S Shipping, International Seaways, Scorpio Bulkers (now Eneti) and Scorpio Tankers.