Houlihan Lokey Advises Nord/LB
Houlihan Lokey is pleased to announce the sale of a €2.6 billion shipping NPL portfolio owned by Norddeutsche Landesbank Girozentrale (NORD/LB) to Cerberus Capital Management, L.P. (Cerberus). The transaction's primary objective was to reduce NORD/LB's large legacy NPL shipping portfolio while minimizing the impact to critical bank capital requirements. The transaction closed on 9 April 2019.
NORD/LB is in the midst of a multiyear transformation process with the goal to reposition the bank for stability and growth, including removal of the large NPL exposures causing meaningful stress to its balance sheet and credit quality. This transaction reduced NORD/LB's overall NPL portfolio by more than a third from €7.5 billion to €4.9 billion and represented one of the largest global private shipping loan portfolio transactions by Gross Book Value in the past decade. The transaction represents a major strategic milestone for NORD/LB in its transformation plan to dispose of legacy assets and raise new capital.
NORD/LB is a German landesbank with a balance sheet in excess of €150 billion, and historically one of the largest global lenders to the shipping sector. Majority owned by the state of Lower Saxony, it has a leading position in the northwest German market, with products covering small retail customers to large corporate lending and financial solutions.
Cerberus is a global leader in alternative investing with over $39 billion in assets across complementary credit, private equity, and real estate platforms. It has established itself over recent years as a dominant player in both the central European banking and shipping markets, leading acquisitions of both BAWAG and HSH Nordbank.
Houlihan Lokey served as the exclusive financial advisor to NORD/LB. This transaction marks another milestone in the success of Houlihan Lokey's growing Financial Institutions Group in Europe and, in particular, the firm's strategic portfolio and capital advisory team for European banks. The team also demonstrated its market-leading knowledge in the shipping loan sector having developed proprietary pricing models and critical market intelligence including investor appetite for various forms of risk. The team utilised a multistep process involving a variety of capital sources (including alternative investors, sovereign wealth funds, and financial institutions) in order to match risk profile with risk appetite and achieve the best possible price and capital outcome for the client.
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