Moody’s reaffirms investment grade for HSH Nordbank with a stable outlook

Hamburg/Kiel, July 11, 2013 - Moody’s rating agency today set the long-term rating for HSH Nordbank at “Baa3” and the short-term rating at “Prime-3”, in each case with a stable outlook. This means that Moody’s has lowered the long-term and short-term rating by one notch in each case and reaffirmed HSH Nordbank’s investment grade status.

Moody’s explained its rating adjustment with final approval by the European Commission of the recent (in June 2013) replenishment of the guarantee provided by the federal states of Hamburg and Schleswig-Holstein still pending. Moreover, given the current market setting Moody’s anticipates further charges, which might result in particular from the Bank’s legacy portfolios in the shipping sector. By contrast, Moody’s took an expressly positive view of the strong support for the Bank provided by its shareholders, Hamburg and Schleswig-Holstein, as well as of its close links to the Savings Bank Finance Group.

“In spite of the fact that we were prepared for this scenario with our financial planning, we regret that Moody’s has failed to take appropriate account of our considerably improved capital resources. The increase in the guarantee has stabilised the Bank over the long term. In our view, our capital resources together with the unqualified support of our owners would have justified a better rating. In addition to this, we are making noticeable progress towards our business model as bank for entrepreneurs and in winding down our risk positions”, said Stefan Ermisch, HSH Nordbank’s Chief Financial Officer.

According to its forecast, as at 31.12.2013 the Bank will post a Core Tier 1 capital ratio pursuant to Basel-III of 10.0 percent. With the addition of a cushion of 1.6 percentage points this equates to an effective ratio of 11.6 percent. The Bank also currently projects a Basel III Tier 1 capital ratio of around 10 percent for the planning period after 2013.