US private equity group KKR has joined with a sovereign wealth fund to take $1.5bn worth of shipping loans from NordLB.
The debt spans 100 ships and covers both performing and non-performing loans, a statement said.
Dr. Gunter Dunkel, chairman of NordLB, said the deal was a significant milestone for the bank as it continued to manage its balance sheet through the ongoing shipping crisis.
“This initial sale clearly demonstrates the bank's ability to attract capital from internationally renowned investors and at the same time yields a very tangible reduction to the bank's shipping exposure,” he said in the statement.
“When this innovative transaction closes, it will be a significant contribution to reducing the bank's overall ship loan exposure from EUR 18bn to EUR 12 to EUR 14bn."
A spokesperson for the bank says the transaction marks the first sale of shipping debt by NordLB to external investors and follows more than one year of talks.
However, he adds other sales will be sought but stresses the bank is not seeking a complete exit from the shipping business.
"We will do shipfinance going forward," he said. "It is still a cornerstone of the business model but on a slightly smaller scale."
KKR, which owns tanker company Chembulk and is also a backer of distressed-deal specialist Borealis Maritime, made splash in Greece in May after teaming with Alpha Bank and Eurobank.
Johannes Huth, head of KKR Europe, Africa and Middle East, said the latest move is in line with its focus on investing in and managing banks’ non-core and under-performing assets.”
The debt will form the initial portfolio of a new company KKR and the sovereign fund have formed to provide management services to banks.
