Case Studies

First-time purchase of receivables in China

NORD/LB has successfully structured a purchase of receivables in China for a middle-market German corporate customer.

In December 2016 a framework agreement was entered into with the customer’s Chinese subsidiary that permits the subsidiary to engage in the revolving sale of receivables from trade receivables denominated in renminbi to a Chinese buyer. The purchase price is also disbursed in renminbi. This deal was enabled by a structure that is tailored to the specific features of Chinese law and invoicing practices and that sees the German-domiciled customer assume liability for its Chinese subsidiary. The debtor’s default risk is assumed by NORD/LB, meaning that the receivables sold are deducted from the customer’s group balance sheet. The monthly purchases are settled by NORD/LB’s Shanghai branch, which also guarantees local personal contact with the parties involved.

€ 135 m Schuldscheindarlehen (bonded loan) arranged for Montana Tech Components GmbH

In autumn 2016, NORD/LB together with a banking consortium arranged a Schuldscheindarlehen (SSD) with a volume of € 135 m and, therefore, the fourth very successful transaction of this type.

The SSD is for general corporate financing purposes and the refinancing of existing loans.

Montana Tech Components GmbH acts as a financing and management company for the Montana Tech Group. The 100% shareholder of MTC is the Montana Tech Components AG, which was founded in 2006. The Montana Tech Group is a technology-oriented industrial group and has a broadly diversified business model that is divided into four operating divisions: Aerospace Components, Metal Tech, Energy Storage (VARTA AG) and Industrial Components. Overall, the group commands leading market positions in fast-growing markets and focuses on key technologies. In view of its wide diversification MTC has only a low degree of cyclicality.

Bonded loan of EUR 350 million arranged for freenet AG

After freenet AG's successful placement of a bonded loan with a volume of EUR 560 million back in spring 2016, an arranger syndicate, including the Joint Lead Arranger NORD/LB, enabled the company to place another bonded loan of EUR 350 million.

The purpose of this bonded loan is to finance part of the syndicated loan agreed in March 2016. This transaction has allowed freenet to confirm its investment grade rating.

The freenet Group is Germany's largest network-independent telecommunications provider. The Group has also established itself in the digital lifestyle segment as a provider of customer household solutions that do not necessarily have to relate directly to telecommunications.

The freenet Group does not operate its own network infrastructure – it markets the mobile communications services of other mobile network operators under its own brand and on its own account. Alongside its own network-independent services and deals in the contract, no-frills and pay-as-you-go segments, the company also offers the network operators' original deals.

Acquisition financing for KSBG for the full takeover of STEAG/ STEAG’s debut promissory note (“Schuldscheindarlehen”) for growth

 KSBG Kommunale Beteiligungsgesellschaft GmbH & Co. KG, a consortium of municipal utilities from North Rhine-Westphalia (NRW), which had already acquired a 51 percent stake in STEAG GmbH from Evonik in 2011, is now the sole shareholder of STEAG GmbH.

NORD/LB was involved in financing the purchase price for the remaining shares as well as in replacing the residual financing of the initial 51% with acquisition financing. An additional eight consortium partners were attracted into this deal. At the same time, a promissory note (“Schuldscheindarlehen”) was issued on behalf of STEAG GmbH. With this capital markets-based financing instrument, STEAG is now well positioned for further investments in the power generation potential in the renewable energies area. Moreover, the financing has strengthened its competitiveness. The capital market transaction was met with high demand from investors and was oversubscribed.

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