Sale of HSH Beteiligungs Management GmbH's Participation in HSH Nordbank AG

Notice inviting expressions of interest

MUNICH--(BUSINESS WIRE)-- HSH Beteiligungs Management GmbH ("the Seller"), which is (in-)directly >90% owned by the Federal States of Hamburg and Schleswig-Holstein (together "the Länder"), intends to sell up to 94.9% (which under certain circumstances may be increased to 100%) of the shares in HSH Nordbank AG ("HSH Nordbank") for a cash consideration in an open, transparent, competitive and non-discriminatory bidding process, in accordance with the European Commission's state aid decision of 2 May 2016 (OJ L 319, 25.11.2016, p. 13).

HSH Nordbank is a leading commercial bank and a competent partner for medium-sized corporate customers in the Northern-German region and in German metropolitan areas with dedicated product know-how and long-standing expertise. It is also a leading commercial real estate lender in Germany and enjoys an established, recognized position as financing specialist for the global maritime industry. Beyond traditional loans, HSH Nordbank provides industry-specific as well as complementary markets and transaction banking products.

HSH Nordbank has two head offices in Hamburg and Kiel and is incorporated under German law. It currently has eight branches in Germany and selected foreign representative offices in New York, Luxembourg, Athens, Hong Kong and Singapore. As of 30 September 2016, it employed 2,226 employees (full- time).

HSH Nordbank has been significantly de-risked and restructured over the last years. As a result, HSH Nordbank's profitability has continuously improved. For the first nine months of 2016, HSH Nordbank posted a pre-tax profit of EUR183mn (IFRS), equivalent to a RoAE (pre-tax) of 7.2%.

HSH Nordbank's portfolio in the Core Bank segment amounts to EUR50.7bn EaD (as of 30 September 2016) and is diversified geographically and across different product and client clusters. Besides its strategic lending portfolio in the Core Bank, HSH Nordbank has set-up a non-strategic portfolio (segment Non-Core Bank) in 2008, which has been actively managed down from EUR110bn EaD to EUR22.3bn EaD (as of 30 September 2016).

HSH Nordbank has a solid capital position, with a CET 1 ratio (fully- loaded) of 13.0% and a leverage ratio (phase-in) of 7.5%. Furthermore, it has an established funding and securitization platform including a Covered Bond License ("Pfandbrieflizenz"). For further information regarding HSH Nordbank, please refer to HSH Nordbank's corporate website at www.hsh-nordbank.com.

It is the intention and clear preference of the Seller to sell all of its shares in HSH Nordbank including all of its assets and liabilities. If an alternative transaction structure is proposed, the extent of the offered risk transfer will be a central evaluation criterion for the Seller. The Länder are entitled to retain up to 25% of the overall shares in HSH Nordbank for up to four years from the completion of the sale.

The (potential) buyer(s) of HSH Nordbank must be independent of HSH Nordbank and the public sector according to the above mentioned European Commission's state aid decision.

The Seller reserves the right to restrict the number of parties in the sales process. In doing so, the Seller will assess the (indicative) bids based on criteria as disclosed in the Process Letter(s) encompassing, inter alia, the availability of financing for the acquisition of HSH Nordbank as well as the capability of receiving all approvals from the relevant competition, regulatory and other authorities. The transaction will be subject, inter alia, to a parliamentary approval both in Hamburg as well as in Schleswig-Holstein. In addition, the acquisition will be notified to the European Commission.

Citigroup Global Markets Deutschland AG (Citi) is acting as exclusive Financial Advisor to the Länder as the (in-)direct owners of the Seller in connection with this sales process. Written expressions of interest in participating in the sales process must be submitted by post, courier, telefax or email only to the contact persons stated below by no later than 12:00 noon (CET) on 27th February 2017.

Expressions of interest must be submitted in German or English. They must contain the (ultimate) interested party's name, address, the names of the responsible individuals to be contacted with questions as well as the names of any mandated advisors (if applicable). Expressions of interest on behalf of a third party (including agents and advisors) will be considered only if a proper power of representation is submitted in writing.

Following the receipt of written expressions of interest, interested investors will be required to sign a customary confidentiality agreement. Based on the admitted expression of interest and the signed confidentiality agreement, interested investors will receive further process information, presumably from 17th February onwards. Submissions of indicative bids are planned for 31 March 2017 - subject to further information.

Legal Notices: Neither this notice nor the release of any confidential information to an interested party constitutes, or may be used for, any offer to sell or a solicitation of an offer to subscribe for or purchase any securities by any person in any jurisdiction or under any circumstance where it is unlawful to make such an offer or solicitation. The distribution of this invitation in certain jurisdictions may be restricted by law, and recipients should inform themselves about, and observe any applicable legal or regulatory requirements in relation to, the distribution or possession of this invitation.

Neither the Seller, the Länder, HSH Nordbank, Citi nor their or their affiliates' respective directors, officers, employees, advisers or agents ("Related Parties") accept any liability to any person in relation to the distribution or possession of this invitation in any jurisdiction. By submitting an expression of interest an interested party confirms that it is a person able to receive the information provided to it without contravention of any unfulfilled registration requirements or other applicable legal or regulatory restrictions.

Citi is acting exclusively for the Länder and no one else in connection with the transaction and Citi will not be responsible to anyone other than the Länder for providing the protections afforded to its clients for providing advice in relation to the transaction or in relation to the contents of this invitation.

Each of the Seller, the Länder, HSH Nordbank, Citi, and their respective Related Parties expressly state that no representation or warranty is made by this invitation and expressly disclaim any and all liability.

Additional features:

Document: http://n.eqs.com/c/fncls.ssp?u=LOILTFWNYQDocument title: Sale of HSH Beteiligungs Management GmbH's participation in HSH Nordbank AG

View source version on businesswire.com: http://www.businesswire.com/news/home/20170122005193/en/

Citigroup Global Markets Deutschland AG
Frank Vogel, +49 69 1366 5659
Managing Director
Fax: + 49 69 5 8999 0583
[email protected]
or
Citigroup Global Markets Deutschland AG
Sae-Won Hwang, +49 69 1366 5633
Director
Fax: +49 69 2222 3330
[email protected]

Source: HSH Beteiligungs Management GmbH

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