Fitch Ratings on March 1 placed certain ratings of HSH Nordbank AG on Rating Watch Negative, following the announcement that the German lender will be sold to U.S. private equity firms Cerberus Capital Management LP, J.C. Flowers & Co. LLC and GoldenTree Asset Management.
Fitch placed the bank's BBB-/F3 long-and short-term issuer default, senior debt and deposit ratings, 2 support rating and BBB-(dcr) derivative counterparty rating on Rating Watch Negative. At the same time, the rating agency upgraded HSH Nordbank's viability rating to "bb-" from "b" and placed it on Rating Watch Positive.
Fitch said it expects HSH Nordbank's issuer default ratings to be driven by the bank's viability rating and no longer by institutional support following the sale. The upgrade of the viability rating is based on the progress that the lender has made in improving its risk profile during 2017 and the fact that the planned sale will enable HSH Nordbank to continue operating as a commercial bank.
The Rating Watch Positive on the viability rating reflects Fitch's view that the rating could be upgraded further if the bank's future strategy becomes clearer under its new ownership.
The agency expects to resolve the rating watches once the deal is completed, which HSH Nordbank expects to take place in the second quarter at the earliest.
