Watson, Farley & Williams has advised HSH Nordbank AG (“HSH”) on its innovative venture to transfer 10 distressed vessels out of HSH’s non-core portfolio to the Navios Group (“Navios”).

The fleet comprises five medium or large range product tankers and five panamax or sub-panamax container vessels, with an average age of six years and a market value in the region of US$218m.

This highly structured complex financing is a landmark deal in the shipping industry, providing a blueprint on how lenders may look to dispose of their non-performing debts without giving up their recovery potential in case of an improving shipping market.

The financing comprises four different levels of debt and security in respect of each vessel and complex inter-creditor arrangements to comply with the securitisation requirements of the lenders.

Navios funded the acquisition through US$120.4m senior bank debt, US$10m investment plus working capital from Navios and a US$173.4m subordinated HSH participating loan.

With seven international offices across Europe, USA and Latin America, Navios is one of the leading global brands in seaborne shipping, specializing in the worldwide carriage, trading, storage and related logistics of international bulk cargoes.

With Athens and Hamburg working closely together, asset finance partners George Paleokrassas (WFW Athens) and Clemens Hillmer (WFW Hamburg) led the team, and were supported by Patrick Smith (WFW London), Electra Stamatopoulos (WFW Athens), Gladys Sexl and Michael Valentin (both WFW Hamburg).

George Paleokrassas, head of WFW Athens, said: “We are delighted to have been able to offer HSH more than 30 years of industry experience and technical expertise on this ground-breaking deal, demonstrating both HSH and WFW’s understanding of, and experience in, the most innovative and sophisticated financings in the shipping sector.”