Highlights From Freshly Minted

A COUPLE SHIPPING BANKS COUPLE

After the State of Hamburg made it clear last year that, at the right price, the 51% stake in Hamburgische Landesbank was up for sale, everyone in Germany has been waiting for an announcement. As LB Kiel already owned the other 49% and had an option to buy the remainder, it was no surprise when the two banks announced that an agreement had been reached. This will, on paper and by our estimates, create the world’s largest shipping bank with between $15 and $20 billion of shipping exposure.

The two banks have been working as two completely separate lenders. The merger, which will become effective on January 1, 2003, will allow the new bank to participate in the top bracket of the ship finance market and could be the largest lender to traditional shipping in the years to come.

With LB Kiel’s strong market presence in Scandinavia, where HLB has been lacking in presence and HLB’s very strong market presence in the Far East, the merger seems to have few overlapping areas of expertise. We expect the bank’s shipping division to be located in Hamburg and would be surprised if Mr. Michael Encke were not left in charge of the new bank’s shipping interest.

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