NORD/LB Asset Backed Finance
NORD/LB’s Asset Backed Finance Group (ABF Group) was launched in New York during 2000.
Senior members of the ABF Group have extensive experience within the securitization market. Core strengths within the group include marketing, credit analysis, transaction structuring, legal review, transaction surveillance, and portfolio management. Previous employers of team members include rating agencies, finance companies and large global banks. Securitization experience of the entire ABF team averages just over 10 years, which manifests itself in an asset portfolio of high credit quality. At NORD/LB, we feel these are the most important factors investors should be looking for in the asset backed commercial paper market.
Hannover Funding Company LLC
NORD/LB’s ABF Group conducts its securitization business through its asset backed commercial paper program, Hannover Funding Company LLC. Established in 2000, Hannover Funding is a special purpose, bankruptcy-remote company that primarily purchases receivables from corporate clients and funds these purchases through commercial paper issuance. Hannover Funding has a very innovative feature in that it can issue commercial paper in US Dollars, Euros, or Sterling.
Hannover Funding has no specific industry focus, but rather is focused on well-structured transactions of high credit quality. Assets included in Hannover Funding’s asset pool include trade receivables, consumer auto loans and leases, corporate auto leases, and corporate loan portfolios. Asset classes are geographically diversified between the United States and Europe
Hannover Funding is rated A-1 by Standard & Poor’s, P-1 by Moody’s and F-1 by Fitch. These ratings are based upon the quality of the underlying assets and the structure of Hannover Funding’s liquidity support. NORD/LB provides full support liquidty to Hannover Funding.
Hannover Funding has experienced consistent non-cyclical growth since its inception. Currently, Hannover Funding’s commitments total over USD 2.7 billion. Total commitments are spread across more than 40 transactions, each structured to at least an "A" ratings level.
Key features of Hannover Funding
- Hannover Funding is a "hybrid" conduit program, which primarily purchases receivables, but may purchase securities and make loans as well. The asset pool includes trade receivables, consumer and corporate auto loans and leases.
- Because it primarily finances client receivables, Hannover Funding essentially is a "multi-seller" conduit.
- Seven major dealers support the program. (Nomura, Royal Bank of Canada, Goldman Sachs, Credit Suisse, Morgan Stanley, Citigroup and JP Morgan Chase) Two of these dealers primarily focus on Euro commercial paper issuance.
- Up to USD 5.2 billion of liquidity support provided by NORD/LB. The first USD 5.0 billion is guaranteed by NORD/LB's two German state owners.
- Liquidity is also syndicated to other banks.
- Credit enhancement is structured for each transaction. Each transaction is structured to at least an "A" ratings level.
- Hannover Funding is rated A-1 by S&P, P-1 by Moody`s and F-1 by Fitch. These ratings are based upon the quality of the underlying assets and the structure of Hannover Funding`s liquidity support.
- Liquidity can be syndicated for each transaction.
- Receivables are typically purchased on a revolving basis.
- Typically transactions have 364-day commitments which are renewable annually.
- Hannover Funding commercial paper issuances can have maturities of up to 270 days. Typical maturities are in the 30 day range.
- The NORD/LB ABF Group structures/arranges all transactions.
- NORD/LB serves as administrative agent.
Projects are among the most complex and challenging transactions to finance because a successful structure must be fully consistent with the fundamental features of the project.