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Loan servicer expands shipping desk, with 15-strong team primed to manage billions of euros of debt.
April 11th, 2019 12:44 GMT
Tradewinds article by Ian Lewis
Debt manager Mount Street has taken on a team of former bankers to help service billions of dollars of German shipping loans.
A new desk headed by former Nord/LB banker Aaron Sen has been formed with 15 banking professionals charged with handling up to €8bn ($9bn) of shipping debt.
Ship-finance sources said the portfolio could include some of the €2.7bn loans that Cerberus Capital Management is acquiring from Nord/LB. That deal, denominated Big Ben, closed this week.
Sen, who was unable to comment on the deal, has swapped his Nord/LB role where he was in charge of ship and loan sales to become head of shipping loan management and resolution with London-based Mount Street.
His department includes fellow director Nick Smith, a 16-year veteran with Royal Bank of Scotland (RBS), and Simon Baker, who joins after several years with the Commonwealth Bank of Australia. The move signals the ambitions of Mount Street, which is a relatively new player to shipping.
The firm came onto the shipping scene at the end of 2017 with the purchase of a loan-management business formerly owned by Germany’s state-owned lender WestLB. But the expansion of Mount Street’s shipping desk reflects a changing scenario that requires loan portfolios to be proactively managed, rather than just administered, Sen said. “This is where the demand came from to get onboard real shipping expertise and shipping bankers,” he said. The threefold expansion of its shipping desk from an initial staff of five is needed for Mount Street to carry out tasks that private equity funds are unable to undertake.
“The funds have the chequebook,” Smith said. “They don’t have the infrastructure. Mount Street provides that to them.” The enlarged shipping desk will help in formulating an exit strategy and restructuring negotiations for the funds. Sen said it will also sell directly to owners, engage with shipbrokers and make recommendations to clients. He acknowledged the potential hurdles of refinancing at a time when liquidity in the ship-finance market is under question. Other challenges could be presented in selling vessels of a certain asset class. Much of the loan portfolio from the German market is expected to be in the containership and multipurpose sectors. But Smith, who was part of a team that wound down the loan portfolio of RBS to the end of 2017, said there are no strict time limits or demands to hive off large numbers of ships in one go. “We don’t have to, within the next six months, sell 50 ships,” he said. “We have a strategic plan over a period of time.”