HSH Nordbank Places First Large Ship Covered Bond in Years

zoom Hamburg-based HSH Nordbank has placed a EUR 500 million (USD 571.9 m) ship covered bond, the German banks first large-volume ship bond since 2008. The order book of the benchmark ship covered bond 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 395 million (USD 451.7 m) 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. The bank says the cover pool is of a very high quality, with a loan-to-value ratio of less than 60 % and overcollateralisation of 38.5 %. The ship mortgages used for cover reflect a diversified portfolio from the container, bulker and tanker ship classes. Rating agency Moodys has given the bond a rating of Baa2. Alongside HSH Nordbank, Barclays, Deutsche Bank, JP Morgan and Natixis took part in the transaction.