Nonrecourse debt or a nonrecourse loan is a secured loan (debt) that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable. If the borrower defaults, the lender/issuer can seize the collateral, but the lender's recovery is limited to the collateral. If the property is insufficient to cover the outstanding loan balance (for example, if real estate prices have dropped), the difference between the value of the collateral and the loan value becomes a loss for the lender. Thus, non-recourse debt is typically limited to 80% or 90% loan-to-value ratios, so that the property itself provides "overcollateralization" of the loan. The purpose of non-recourse debt is to require lenders to underwrite their loans on a sustainable and prudent basis since the lender is in the first-loss position with these loans, not the borrower.
In simple terms, non recourse means that if you've borrowed $100 million to buy some properties and you use them as a collateral for the loan, once you sell the properties and have to settle the debt, you may settle it for less than the borrowed amount if the purchase price was lower than $100 million. It means that the bank can not go after you once the property is sold for say $90 million. In a reourse transaction, you would still owe the bank another $10 million despite having liquidated the collaterized asset.
Or non-recourse debt could be debt, for which the parent (US assets of SRZ) is not liable for. The German assets of SRZ are, as much as the lender can recover.
Pretty standard way of limiting the liability of the parent entity.
Check out AES, as almost all of their international investments, limit AES's local assets as collateral for their respective country borrowings. The lender can only go after their assets in that country. Walked away from their assets in Venezuala (nationalization), but lender (banks in Venezuala) could only recoup based on their Venezualian assets. Always, a good practice in politically unstable countries. Not suggesting Germany is politically unstable.
Hey, the non-recourse debt structure is the only reason the parent Catholic Archdiocese is not bankrupt. Each parish could only be sued for the assets at the only local parish. The parent Catholic Archdiocese (second largest owner of land after the US Federal government) did not pay up for the fun the local ministers had barbecuing asses of unsuspecting teenagers.
Zoom - put it away and you will be fine. The worst is behind SRZ.