German Landesbank Nord LB, shipping company Offen Group and alternative assets services provider Caplantic have announced the launch of Chrystal Ocean Advisors, which is set to offer restructuring programmes for non-performing loans in the shipping sector.
According to Nord LB, launch is motivated by growing demand among institutional investors for investments in the shipping industry, which is currently being held back by lack of industry expertise and liquidity problems in the sector.
Chrystal Ocean Advisors aims to act as an advisor to third parties in managing liquidity issues with shipping credit, however, it will not take over credit risk itself. The offering will focus on facilitating direct investments and private equity funding, rather than the securitisation of debt.
Nord LB is a public savings corporation owned by the federal states of Lower Saxony and Saxony Anhalt, Caplantic is an in alternative asset management joint venture between Nord LB, Thalanx Group and Bankhaus Lampe.
The board of Chrystal Ocean Advisors will consist of Christoph Geck-Schlich, CIO at Offen Group, Michael Schwalba, CEO at Caplantic. Oliver Faak, head of Shipping Finances at Nord LB will be chair of the supervisory board for Chrystal Ocean Advisors.
The launch comes at a challenging time for the global shipping industry, with the Baltic Dry Index declining by almost 40% YoY.
According to German regulator Bafin, 19 German banks held a total of €95.bn in shipping debt as of 2013, among which about one third was at risk of being written off. Almost a quarter of exposures had loan to value ratios exceeding 140%.
Nord LB itself currently holds just under 18bn in shipping debt, it is the second biggest lender to the German shipping industry. However, according to a Nord LB spokesperson, Chrystal Ocean Advisors will focus on assisting third parties.