Implode-o-Meter News - Container-Shipping Slump Stings German Investors; $100B German Bank Exposure

The country's banks and retail investors have been big investors in shipping over the years and now own more of the world's container-ship capacity than any other country--about 29%, according to the German Shipowners' Association. The weakness in the global industry has left many of those investments underwater.
Much of the money is tied up in so-called Kommanditgesellschaft funds. Banks and asset managers in past years hawked shares in the closed-end funds to wealthy private investors such as doctors and lawyers.
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Now, the plunging fortunes of the container-shipping business are punishing those bets. Almost one-fifth of the 2,200 ships owned by the funds are insolvent, research firm Deutsche Fondsresearch estimates.
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The KG debacle also has hit several big German banks that provided KGs with debt financing to leverage investor equity. HSH Nordbank of Hamburg, once the world's largest shipping lender, was bailed out the states of Hamburg and Schleswig-Holstein earlier this year because of soured shipping loans. Other German banks, including Commerzbank AG, have stopped lending for ships.

See also German Banks Face $100 Billion Exposure to Shipping (in the cleartext). See also German Banks - Shipping's Next Victim? (VIDEO, Globe and Mail).

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Container-Shipping Slump Stings German Investors; $100B German Bank Exposure