NORDLB sells down exposure to raise capital

The regional lender has moved assets across to its investor portfolio and securitised and sold a €178 million mezzanine tranche.

German lender Norddeutsche Landesbank (NORD/LB) has shifted another €5.1 billion of credit assets off its own balance sheet into its Northvest portfolio, allowing institutional investors to gain exposure to the underlying assets. The transaction brings the overall Northvest portfolio to €14.7 billion via 8,400 loans. 

As part of the transaction, the lender sold down €178 million via a securitisation of some of the underlying loan assets. Last year, NORD/LB structured and sold its first €450 million securitisation of the portfolio.

Investors were sourced by an unnamed asset manager. The bank structured the assets into senior, junior and mezzanine slices, only selling the mezzanine piece to investors, a spokesman for the lender told PDI . The bank declined to reveal the pricing or terms of the deal.

The Northvest portfolio is comprised of 35 percent aircraft financing, 30 percent German mid-market corporate debt, 25 percent real estate and 10 percent renewable energy. 

The bank has been moving assets into the Northvest portfolio to help boost its core tier 1 capital ratio ahead of increased capital adequacy requirements as mandated by Basel III regulations.  

“The top-up of the Northvest transaction is a further component of NORD/LB's capital-boosting strategy,” said the bank's board member for capital markets, Hinrich Holm.

The deal will allow the lender to reduce capital held against risk-weighted assets and boost its common equity tier 1 ratio by 0.3 to 0.4 percent.

Risk management company Caplantic Alternative Assets, a joint venture between NORD/LB, Talanx AG and Bankhaus Lampe, will report on the credit pool for investors.

NORD/LB has total assets of €191 billion. It has headquarters in Hanover, Braunschweig and Magdeburg, and core businesses include structured financing for energy and infrastructure, ship and aircraft financing, commercial real estate and corporate finance.