German banks to unpack

German banks are aiming to break apart syndicates that have financed multiple vessels as they seek flexibility in dealing with troubled loans, a leading restructuring lawyer said today.
Stefan Rindfleisch

Stefan Rindfleisch

Stefan Rindfleisch, a partner at Hamburg law firm Ehlermann Rindfleisch Gadow, said the moves could lead to more loan sales, more vessel arrests and more foreclosures.

"Lenders are seeking to turn the syndicated loans into single-asset financings," he told the Marine Money Week conference in New York.

"That will, of course, increase the flexibility of the banks," he added. "Each bank is going to follow its own strategy as to what to do with these loans."

The moves to garner greater flexibility over vessel mortgages comes as German banks are under increasing pressure to reduce the size of their shipping loan portfolios.

They also are expecting greater scrutiny over shipping debt as banks complete a sweeping disclosure of their loan assets mandated by the European Central Bank.

Meanwhile, Rindfleisch identified a seemingly opposite trend in the structure of German limited partnerships (KGs).

The lawyer said German shipping companies are aiming to restructure single-ship KGs into so-called master KGs, in which investments in individual vessels would be converted into shares in a holding company controlling a fleet of ships.​

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