ASSET BACKED FINANCE – OVERVIEW
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 11 years.
The group’s perspective is that experience is the single most important variable in maintaining a growing and profitable business for the bank
Hannover Funding Company
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. Its largest asset classes are auto loans and auto leases, in both cases geographically diversified between the United States and Europe. Other asset classes are primarily domiciled in the US, with 83% of the total portfolio consisting of US assets. Hannover Funding has not had any direct or indirect residential mortgage exposure of any type since September 2006.
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 credit and liquidity support. NORD/LB provides a program-wide letter of credit to Hannover Funding, the amount of which is determined by the rating agencies. In addition, NORD/LB provides over 90% of the backup liquidity lines, which are required to be 102% of the underlying assets.
Hannover Funding has experienced consistent non-cyclical growth since its inception. Commitments and outstandings have increased by a factor of five since 2001. Currently, Hannover Funding’s commitments total over $5BN. Total commitments are spread across more than 50 transactions, each structured to at least an "A" ratings level.
