PORTFOLIO SALE OR PORTFOLIO RESOLUTION which is the best option for shipping NPLs

PORTFOLIO SALE OR PORTFOLIO RESOLUTION which is the best option for shipping NPLs

How Big is the Market? Slide 2

Factors driving a Lender s decision to sell Seller s perspective Regulatory pressures, capital costs; recent ECB Guidance Strategic decision to exit shipping, deleverage, changing criteria within banks Restructuring fatigue or breakdown of client relationship-resource issues Bid/Offer Spread has narrowed Slide 3

Factors driving a Buyer s decision to buy Debt purchaser s perspective Distressed debt will sell at a discount to asset value Private equity/hedge funds: relationship with owner not key factor, loan to own aim to make quick recovery and exit or to achieve targeted returns different regulatory environment to banks Different view of money Slide 4

Due Diligence key issues Structural difficulties/regulatory obstacles and legal risks Regulatory issues, need for banking licences Buyer meet transferee criteria in documentation bank or financial institution - use of SPVs Borrower consent required? Is the buyer prepared to risk permanent subparticipation? In a portfolio of loans there will be diversity Data protection laws/confidentiality Slide 5

Due Diligence key issues Structural difficulties/regulatory obstacles and legal risks (continued) Syndicated facilities Other roles e.g. swaps, agency, account bank etc. Undrawn Facilities Slide 6

Factors influencing pricing Tax issues in buyer s or seller s jurisdictions (as a result of the sale/transfer) Historic compliance with Sanctions (especially USA). Whether adequate levers to procure future compliance (Germany) need to avoid Facilitation of sanctions breaches Cost of exit strategy (enforcement) Pricing risk Slide 7

Enforcement Increasing use of Ch 11 and other costly and slow Insolvency regimes Complexity of enforcement-taking possession; arrest; auction. Shares Pledges. Liability Risk Time and expense considerations- good and bad Jurisdictions WFW Approach consensual where possible Slide 8

NORD LB Case Study Q & A Slide 9

Frank Dunne Biography FRANK DUNNE SENIOR PARTNER New York Tel: +1 212 922 2254 fdunne@wfw.com Frank s practice involves a broad range of ship finance work for major international shipping finance lenders and commercial shipping transactions for major international shipowners, including joint ventures, charter structures, new building contracts, and ship (and corporate) acquisitions. Frank has been closely involved in assisting private equity institutions investing in shipping and has also led on a number of high-profile restructuring, workout and dispute resolution situations. Having spent some years working in Greece during the 1980s, Frank is well known in Greek shipping and finance circles and maintains a close working relationship with the Greek market. Frank relocated to New York in 2016 introducing English law capability to our offering and is ranked as an Expert Based Abroad in USA in Chambers Global 2017. He has also previously been described by Chambers UK as providing great support in dealing with syndicates of banks and good at advising on complex issues with high interests at stake and is highly respected. Slide 10 61095245v1

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