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

People & Company News

Matson Announces Quarterly Dividend

Matson, Inc. declared a first quarter dividend of $0.17 per common share, the company’s board of directors announced. The dividend will be paid on March 5, 2015

Hogan Named VP at Newport News Shipbuilding

Rob Hogan has been appointed vice president of manufacturing at the Newport News Shipbuilding division of Huntington Ingalls Industries (HII), the company announced.

Kongsberg Expands Louisiana Office, Training Facility

Kongsberg Maritime has purchased approximately 5.2 acres for new construction on an 82,980 sq ft office and training facility. Construction on the James Business

Finance

Matson Announces Quarterly Dividend

Matson, Inc. declared a first quarter dividend of $0.17 per common share, the company’s board of directors announced. The dividend will be paid on March 5, 2015

Kirby Reports Record Earnings

Kirby Corporation announced record net earnings of $68.1 million, or $1.19 per share, for the fourth quarter 2014 (ended December 31). The results bested 2013’s fourth quarter figures of $64.

Baltic Sea Freight Index Falls to Lowest Level Since 1986

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, spiralled downwards to its lowest level in nearly three

Vessels

Maintenance Woes Led to Digby Ferry Grounding

Maintenance deficiencies and inadequate emergency procedures led to November 2013 grounding of Princess of Acadia in Digby, Nova Scotia    Maintenance deficiencies

Ferus Smit to Launch Newbuild for Symphony Shipping

Ferus Smit announced it will launch Newbuuld 417 on Saturday, February 21 in Leer.   Newbuild 417, a multipurpose vessel to be christened Nordana Sky, is the

Australia Gives Landing Craft to the Philippines

The Australian Government will gift two recently-decommissioned Landing Craft Heavy vessels, including a package of spare parts, to the Philippines Government,

Consulting

AAL Launches New Operation in Japan

AAL has announced the launch of a new operation in Japan AAL said the move aims to provide services and on-ground operational support directly to customers in the country,

ClassNK Releases Improved "e-Application"

ClassNK announced the release of an improved "e-Application" system. This improvement was planned based on requests from the users. Therefore, firstly we would

Launch of Asian Marine Casualty Forum

The Crisis in Global Maritime Casualty Response – Now Is the Time To Act – An industry Forum Designed to Promote Change An industry forum aimed at producing

 
 
Maritime Security Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Salvage Ship Electronics Ship Repair Sonar
rss | archive | history | articles | privacy | terms and conditions | 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: 0.6580 sec (2 req/sec)