NORD/LB Norddeutsche Landesbank has topped up its “Northvest” credit portfolio transaction for institutional investors by an amount of €5.1 billion. Northvest offers institutional investors the opportunity to invest directly in the bank’s credit-based business model. In March 2014 the Bank issued a securitisation tranche of the extensive credit portfolio that comprises four asset classes.
The upsized transaction is based on a reference portfolio of around 8,400 high-quality loans with a total volume of approximately €14.7 billion. The portfolio comprises financings from the four asset classes aircraft, renewable energy, commercial real estate and German Mittelstand corporates. With this upsize, international institutional investors with long-term investment strategies took on a tranche of securitised credit risks totalling further €178 million via an investment management company. As early as March of last year, NORD/LB issued a tranche of €450 million to institutional investors. Confidentiality was agreed regarding the terms. The other tranches will remain with NORD/LB, which will continue to be the contract partner for all its borrowers.
The “Northvest platform” offers investors the opportunity to invest directly in the broadly diversified and yet also highly specialised business model of NORD/LB. “With Northvest we have developed an attractive product for institutional investors who, in the current period of low interest rates, are looking for alternative investment opportunities,” said NORD/LB’s Board member for Capital Markets, Dr. Hinrich Holm.“ The transaction is being monitored by the risk management company Caplantic Alternative Assets GmbH. Caplantic, which is based in Hanover, is a joint venture between NORD/LB and Talanx AG and Bankhaus Lampe. It will maintain the investor’s interests in independent risk reporting regarding the credit pool.
“The top-up of the Northvest transaction is a further component of NORD/LB’s capital-boosting strategy,” said Holm. The top-up of the Northvest transaction means that the Bank can reduce its risk-weighted assets and release equity. It is likely that this will have a positive effect on the Common Equity Tier 1 ratio of NORD/LB to the tune of 0.3 to 0.4 percentage points.
With total assets of €191 billion, NORD/LB is a leading German business bank. Its core business segments include structured financing in the energy and infrastructure sector, ship and aircraft financing, corporate customers business, commercial real estate financing, capital market business and private and commercial customers. The Bank has headquarters in Hanover, Braunschweig and Magdeburg and branches in Düsseldorf, Munich, Hamburg and Schwerin. NORD/LB is represented outside of Germany by a subsidiary in Luxembourg and branches in London, New York, Singapore and Shanghai.
Caplantic GmbH is a joint venture between NORD/LB and Talanx AG and Bankhaus Lampe. As a regulated financial services provider, Caplantic has in-depth experience in the analysis and continuous risk monitoring for large alternative asset portfolios. A portfolio of more than EUR 14 billion is currently being managed on the risk side. Additionally the amount of private equity funds under administration exceeds an amount of EUR 3 billion. The focus is on the asset classes of private equity fund investments, infrastructure, aircraft, shipping, real estate, and corporates with major customers from the institutional segment and the banking sector in equal measure. This business is projected to expand further. Caplantic has offices in Hannover and Cologne.
