Investors Snap Up Shipping Loans, Reflecting Growing Confidence

MarineLink.com
Friday, April 04, 2014
Calculator credit Dominic Alves CCL

Global private equity firm KKR has bought $150 million worth of shipping loans from two European banks amid a surge of interest in the industry as world trade in goods picks up along with the global economy.

There have been a flurry of deals in recent months for ship finance loans, many of which are being put up for sale by banks under pressure to boost their capital in order to adhere to new, stricter industry legislation born of the financial crisis.

The banks have suffered alongside the shipping firms they lent to, as the latter endured one of their worst downturns in decades. Many firms defaulted on loans and several collapsed. As a result, the banks are offloading what they see as risky assets at cheap prices, even as trading conditions improve.

KKR picked up loans taken out by Indonesian oil and gas shipping group PT Berlian Laju Tanker that were sold by Sweden's Nordea Bank and France's BNP Paribas, trade finance sources with knowledge of the matter said.

KKR, Nordea Bank and BNP Paribas all declined to comment, while Berlian Laju did not respond to requests for comment.

Pricing on the deal was in the region of 70 percent of the value of the loans, the sources said.

A survey by accountancy and advisory firm Moore Stephens last week showed shipping confidence in February reached its highest level since 2008, while respondents indicated growing interest from private equity investors.

"Through buying shipping loans at a discount, investors are entering at a lower threshold. The freight market right now is okay, so companies will likely be able to service loans, thus funds make their 5 percent, which is a nice carrying yield," one trade finance source said.

"If market goes up, their loans will appreciate, thus there will be additional benefit and return. If the market goes to hell or they think they can find a better management team, then they just take over the vessels and become shareholders and own the business."

Source: Reuters


 

 

 

Maritime Reporter June 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Impact of Financial Crisis on Greek Shipping

Though international analysts like Morgan Stanley said that the Greek crisis will not have a direct impact on shipping companies, Greek shipping companies listed on U.

APL’s Schedule Reliability Scales Up

APL was the most reliable carrier with a global on-time performance of 85.5% in May 2015, according to the latest Global Liner Performance Report by SeaIntel Maritime Analysis.

Gazprom, Gasunie Sign Framework Agreement - LNG

At a Meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Han Fennema, CEO and Chairman of the Executive Board of Gasunie a Framework

Finance

Migrant Sailboat Sinks in Aegean, 17 Missing

A sailboat carrying migrants sank in in the Aegean sea between Turkey and Greece on Tuesday and at least 17 people were missing, Greek authorities said. Greece's

Japan's MHI Bags Indian Oil's LNG Storage Tank Contract

Indian Oil Corp (IOC) has awarded a contract to build two football stadium-sized liquefied natural gas (LNG) storage tanks at its upcoming Ennore LNG import terminal

GAIL to Offer Sops for Foreign Shipbuilders

GAIL India will offer foreign shipbuilders five years to make liquefied natural gas (LNG) carriers in India, double the time allowed to deliver ships from their home shipyards,

Vessels

Impact of Financial Crisis on Greek Shipping

Though international analysts like Morgan Stanley said that the Greek crisis will not have a direct impact on shipping companies, Greek shipping companies listed on U.

APL’s Schedule Reliability Scales Up

APL was the most reliable carrier with a global on-time performance of 85.5% in May 2015, according to the latest Global Liner Performance Report by SeaIntel Maritime Analysis.

Haiti’s Port Lafito Officially Opens

GB Group inaugurated their Port Lafito, a world-class modern container port in Haiti. They informed that the port is now open and operational. Port Lafito

Consulting

Impact of Financial Crisis on Greek Shipping

Though international analysts like Morgan Stanley said that the Greek crisis will not have a direct impact on shipping companies, Greek shipping companies listed on U.

Indonesia Expects Total to Decide on Mahakam within days

French oil firm Total  will decide how much interest it will retain from 2018 in Indonesia's offshore Mahakam oil and gas block over the next two days, the

Research Vessel Heincke: Serving Science for 25 years

7 July 2015. A quarter of a century old, with over 900,000 kilometres (488,842 nautical miles) logged and still on the cutting edge of science and technology:

 
 
Maritime Security Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1685 sec (6 req/sec)