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Distressed Debt Trading

COMMERZBANK. Distressed Debt Trading. Jens Georg Nawrath Head of Distressed Debt Trading. Frankfurt/Main, October 5, 2005. Global Intensive Treatment. Global Intensive Treatment Office. Distressed Debt Trading. Guidelines. Workout. Risk-controlling. Restructuring . LLP. Liquidation.

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Distressed Debt Trading

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  1. COMMERZBANK Distressed Debt Trading Jens Georg Nawrath Head of Distressed Debt Trading Frankfurt/Main, October 5, 2005

  2. Global Intensive Treatment Global Intensive Treatment Office Distressed Debt Trading Guidelines Workout Risk-controlling Restructuring LLP Liquidation

  3. Commerzbank`s approach • Commerzbank Aktiengesellschaft as „German Mittelstandsbank“ • Long lasting experience in non-performing business • Primary focus is to restructure transactions in order to benefit from upside potential ... however, ...

  4. Advantages of a Secondary Market Transaction • Commerzbank AG considers approaching the secondary market, only if that seems more opportune than restructuring a disstressed situation; e.g.: • Release of Capital • Time Value of Money •  Minimising Risk • Optimising Portfolio Structure • Reduction of Capacity Load

  5. Lessons learned... • Confidentiality: some parties tend not to respect confidentiality as sometimes Information pertaining to the trade and/or conditions leaks out • Transfer of assets • Challenge: • „consent of borrower “ • „consent of third parties“ (e.g. State Guaranties) • Delay of closing • Pool-Parties exclude Transferlanguage in Pool-Agrements ... for a successful trade

  6. Recent market trends • Status quo: Broker-Dealers act as intermediary • End Investors • Sellers • Migration from Portfolio Transactions to Singel Asset Trades • Multiplicity of transactions and development of a more sophisticated market Hedgefunds try to get direct access to sellers • Broker-Dealers and Hedgefunds try to set up Joint-Ventures with sellers

  7. Thank you for your attention. Jens-Georg Nawrath

  8. Contact Jens-Georg Nawrath Head of Distressed Debt Trading ZCO - Global Intensive Treatment Office Kaiserplatz 60311 Frankfurt am Main Tel.: +49-69-136-29142 Fax.: +49-69-136-59142 e-mail: jens-georg.nawrath@commerzbank.com Christian Daynes Distressed Debt Trading ZCO - Global Intensive Treatment Office Kaiserplatz 60311 Frankfurt am Main Tel.: +49-69-136-27424 Fax.: +49-69-136-57151 e-mail: christian.daynes@commerzbank.com

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