HSH Nordbank and Aurelius Capital launch European real estate mezzanine fund
Hamburg/Kiel/Vienna, June 12, 2007 - HSH Nordbank AG and Aurelius Capital Management have established a joint venture under the name of Aurora Real Estate Partners. The aim of the newly created platform is to establish and manage a portfolio of high-yield real estate loans, focusing initially on Europe. The loans acquired for the portfolio are due to be securitized as commercial real estate collateral debt obligations (CRE CDOs) and placed on the capital market. The general figure set for the loans to be contributed is between five and 50 million euros each, with the fund's target size totaling up to 300 million euros.
The new mezzanine fund launched as part of the joint venture is designed to serve the finance requirements particularly of those real estate customers requiring a higher percentage of borrowed capital. Subordinated loan tranches from the fund can be made available, for which there is growing demand on the market. The business opportunities for banks in this segment with long-term loan commitments on their balance sheets are limited, due to the high equity backing required by Basle II. In November 2006, HSH Nordbank launched a European CMBS program for securitizing senior loan tranches with a LTV ratio of up to 75%. “With the establishment of our new platform we have created the conditions for more comprehensive exposure on the rapidly growing market of high-yield loans and collateral debt obligations in the real estate sector," explained Peter Rieck, Deputy Chairman of HSH Nordbank’s Management Board. “We have widened the range of financing options we are able to provide to professional real estate investors by adding an important element. At the same time, through the capital relief realized in this way, HSH Nordbank is also expanding its options in the area of senior finance deals. It gives us particular pleasure to have found, in Aurelius Capital Management GmbH, a partner with extensive experience, an excellent reputation and a very strong international team.”
“The establishment of a CRE CDO platform constitutes for Aurelius Capital Management an important step on its way toward the expansion of the existing company. A partnership with HSH Nordbank, which has an excellent global network and know-how in the segment of commercial real estate finance at its disposal, constitutes for us a key basis of successful collaboration. Using both the size and strength of HSH Nordbank in generating assets and the ability of Aurelius Capital Management to identify and implement highly profitable opportunities, our joint subsidiary Aurora Real Estate Partner aims to claim the position of leading CRE (commercial real estate) manager in Europe in the medium term,” explained Hans-Michael Schania, CEO of Aurelius Capital Management.
Aurelius Capital Management is a partner of Aurelius Consulting AG, which in turn falls within the sphere of influence of Land NÖ Finanz- und Beteiligungsmanagementgesellschaft (FIBEG). Both companies are already very active on the securitization market. Aurelius Consulting AG is FIBEG's know-how, product and distribution platform. Aurelius Capital Management focuses specifically on managing asset-backed securities and CDOs. HSH Nordbank AG has extensive experience and a strong market position in international commercial real estate finance. Over the past few years, it has steadily expanded its lending portfolio in the real estate business to approx. EUR 28 billion.
HSH Nordbank AG is a strong regional bank in Northern Europe with total assets of € 200 billion. Some 4,400 of the bank’s employees provide corporate and high net-worth clients around the globe with premium bank products and services. In its core region of Hamburg and Schleswig-Holstein, it is the market leader in the corporate customer segment. HSH Nordbank is an acknowledged partner of the capital markets and international sector specialist. Its main focus is on transportation and real estate. In fact, HSH Nordbank is the world’s largest provider of ship finance and covers the entire value chain in the transportation segment. In the area of real estate, HSH Nordbank is one of the strongest banks in Germany, acting as a provider of services relating to all aspects of real estate.
For more information please visit our website at www.hsh-nordbank.com.
Aurelius Capital Management GmbH (ACM) is active on the structured-credit and structured-finance markets and specializes in managing and structuring credit risk in the form of collateralized debt obligations (CDOs) and asset-backed securities (ABS) in different currencies. Aurelius Capital brings together an internationally renowned and highly respected team with an average of more than 10 years' market experience in the structuring, investment and management of structured credit products.
For further information please visit www.aurelius-cm.com
Aurelius Consulting AG is an asset-management company that falls within the sphere of influence of Land NÖ Finanz- und Beteiligungsmanagementgesellschaft (FIBEG) and acts as know-how, product and distribution platform. All told, FIBEG has invested approx. EUR 4.6 billion in products managed by third parties. A large part of FIBEG's investments in the area of structured finance is managed by Aurelius Capital Management.
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