HSH Nordbank has raised €2.4 billion after transferring a €5 billion non-performing loan (NPL) portfolio to hsh portfoliomanagement AöR, an SPV established by the German states which own the regional lender having bailed it out after the financial crisis.
The transaction forms part of a restructuring plan agreed between HSH, which is in danger of being wound down, its majority owners - states Hamburg and Schleswig-Holstein - and the EU.
Under the restructuring plan, the bank will be divided into a holding and an operating company, then sold.
The EU agreed the bank can sell up to €6.2 billion in NPLs to its two state-owners and an additional $2 billion on the open market.
Although the NPL portfolio was sold at market rate - a significant loss on the ordinal loans value - it should make it easier to find a buyer for HSH.
The EU has said HSH has until February 2018 to find a buyer (an additional six-month extension may be possible) or it will be wound down.
Much of HSH's problems stem from its strong focus on shipping; as the industry suffered heavy loses following the financial crisis so has the bank, leaving it unprofitable.
JPMorgan Chase is financing the acquisition.
Linklaters (Andreas Steck, Jan Endler, Thomas Niessen, Mario Pofahl, Marc Trinkaus) acted for Hamburg and Schleswig-Holstein.
Freshfields Bruckhaus Deringer (Patrick Cichy, Marius Berenbrok, Torsten Schreier, Christoph Gleske, Michael Josenhans) advised HSH Nordbank.
Clifford Chance (Bettina Steinhauer, Barbara Mayer-Trautmann, Marc Benzler, Oliver Kronat, Joachim Schütze, Felix Mühlhäuser, Frank Scholderer, David Elshorst) represented JPMorgan.