trending Market Intelligence /marketintelligence/en/news-insights/trending/yqfaau_whns3zruftfejsq2 content esgSubNav
In This List

Report: Bondholders 'concerned' by German states' planned sale of HSH Nordbank

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Report: Bondholders 'concerned' by German states' planned sale of HSH Nordbank

HSH Nordbank AG holders of €1 billion principal of Tier 1 and upper Tier 2 bonds have expressed concern regarding the proposed plan of the German states of Schleswig-Holstein and Hamburg to sell their stakes in the lender to U.S. private equity investors, Thomson Reuters' IFR reported.

The states, which own a 94.9% stake in HSH Nordbank, confirmed Feb. 28 that they had agreed to sell their stakes to Cerberus Capital Management LP, J.C. Flowers & Co. LLC and GoldenTree Asset Management for around €1 billion. The deal concludes a privatization process requested by the European Commission that had to be finalized by the end of February to comply with EU state aid rules. Also involved in the sale are Austrian bank Bawag PSK and Centaurus Capital LP.

The group of bondholders, which offered to exchange their notes for equity in HSH Nordbank when the sales process began, said they were concerned about the nature of the planned transaction's process and "its negative impact on the bank and its stakeholders, for the benefit of the buyers," according to the March 5 report. Other bondholders, including retail holders, were also invited to get in touch with the group to collectively discuss their concerns.

The notes sold off after HSH Nordbank said measures to "optimize" the bank's liabilities will also be part of the privatization, the details of which are expected when the bank's full-year 2017 results are published April 26, the report noted.

In the course of the privatization, the nonperforming-loan portfolio of HSH Nordbank will be sold to an acquisition vehicle, which will be managed by Cerberus, J.C. Flowers, GoldenTree and Centaurus at a lower price than its current book value, IFR said. The move will incur a charge expected to lead to a pretax loss of roughly €500 million for 2017.