HSH Nordbank places EUR 500 million benchmark ship covered bond

Banking, Shipfinance — By on February 4, 2015 at 9:56 AM

Logo_HSH_kleiner SchutzraumHAMBURG/KIEL HSH Nordbank has placed a large-volume ship covered bond for the first time since 2008. The order book of the benchmark ship covered bond with a face value of EUR 500 million was substantially oversubscribed within a short period of time. The most recent placement by HSH Nordbank continues on from two smaller issues of ship covered bonds with a total face value of around EUR 375 million last year.

“The sound demand from investors is evidence that the market considers our ship covered bond to be a suitable diversification tool, ” said Mark Bussmann, Head of Strategic Treasury at HSH Nordbank. The fixed-interest ship covered bond has a three-year term and carries an annual coupon of 0.5 percent. With a loan-to-value ratio of less than 60 % and over HSHcollateralisation of 38.5 % the cover pool is of very high quality.

The ship mortgages used for cover reflect a diversified portfolio from the container, bulker and tanker ship classes. Rating agency Moody’s has given the bond a rating of “Baa2”. Alongside HSH Nordbank, Barclays, Deutsche Bank, JP Morgan and Natixis took part in the transaction.

Ship covered bonds, like mortgage and public-sector covered bonds, meet the strict requirements of the German Pfandbrief Act.

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