Traditional and New forms Ted Petropoulos HEAD PETROFIN RESEARCH P - - PowerPoint PPT Presentation

▶
traditional and new forms
SMART_READER_LITE
LIVE PREVIEW

Traditional and New forms Ted Petropoulos HEAD PETROFIN RESEARCH P - - PowerPoint PPT Presentation

Mar 26, 2023 94 likes •239 views

11 th Maritime Congress 10 January 2019 A brief review of current trends in ship finance Traditional and New forms Ted Petropoulos HEAD PETROFIN RESEARCH P ETROFIN R ESEARCH Pre-Final Bank Shipping Portfolio Top 40 Banks www.petrofin.gr

slide-1
SLIDE 1

Ted Petropoulos

HEAD

PETROFIN RESEARCH

11th Maritime Congress 10 January 2019

A brief review of current trends in ship finance Traditional and New forms

slide-2
SLIDE 2

$18 $17 $17 $17 $17 $15 $14 $14 $14 $13 $13 $12 $11 $10 $10 $10 $9 $9 $7 $6 $6 $6 $6 $5 $5 $5 $5 $4 $4 $4 $4 $4 $4 $3 $3 $3 $3 $2 $2 $2 $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00 $20.00

China Exim* DnB* BNP Paribas* Bank of China* KfW* Korea Exim* SUMI TRUST* Credit Agricole CIB* DVB* ABN Amro* Nord LB/Bremer* Citi* Credit Suisse* Nordea* SMBC* China Development Bank* SEB* ING* HSBC* Danske Bank/Fokus Bank* Standard and Chartererd* Iyo Bank* Bank of America Merril Lynch* Danish Ship Finance* Korea Development Bank* HSH Nordbank * Societe General* Hiroshima Bank* Japan Bank for International Cooperation* Swedbank* ICBC (excluding Leasing)* Unicredit* DBS* Deutsche Bank* Piraeus Bank* National Bank of Greece Commonwealth Bank of Australia* Alpha Bank* CIC* Helaba*

Top 40 Banks - Global Shipping Portfolios

Pre-Final Bank Shipping Portfolio – Top 40 Banks as of end 2018

PETROFIN RESEARCH

www.petrofin.gr

January 2019

End 2018 pre-final total: $329.08bn End 2017 total: $345bn

slide-3
SLIDE 3

Global Bank ship finance pre-final results

  • Top 40 banks’ share of global ship finance is

reducing

  • Clear shift from Western banks to Far Eastern

banks

  • Large exodus of major banks in ship lending
  • Higher loan yields and fees

PETROFIN RESEARCH

www.petrofin.gr

January 2019

slide-4
SLIDE 4

Global Bank ship finance pre-final results

  • Selective/targeted lending
  • Increasingly stringent terms/conditions
  • Outlook for 2019 calls for further

consolidation by Western banks and a rise in Far Eastern finance

PETROFIN RESEARCH

www.petrofin.gr

January 2019

slide-5
SLIDE 5

Alternative forms of finance

  • Alternatives to Bank finance:

– Lower cost funds (cost up to 10% p.a. for very secure transactions structured as loans. – Lower cost funds (approx 15%p.a.) for higher leveraged transactions but flexible and accommodative, structured as loans/equity/profit sharing

PETROFIN RESEARCH

www.petrofin.gr

January 2019

slide-6
SLIDE 6

Alternative forms of finance

  • Equity
  • Mezzanine
  • Secured Finance

The above 3 can also be combined together in any form

  • Export Credit Finance

PETROFIN RESEARCH

www.petrofin.gr

January 2019

slide-7
SLIDE 7

Alternative forms of finance

  • Novel alternatives:
  • Online finance: like ebanking, cuts down red tape, proposed as

alternative to financing gap, investor oriented – e.g. eShipfinance.com (Lunde/Tzoutzouraki)

  • Crowdsourced: Yieldsweep: venture-capital backed, asset-based lender.

Vessel on bareboat charter to shipmanagement company which has

  • ption to buy, residual value insurance in case of value decline

(Cambanis, Fragos) Erst Trust Group: tapping the retail market There are more alternative ship financing schemes in the pipeline

PETROFIN RESEARCH

www.petrofin.gr

January 2019

slide-8
SLIDE 8

Alternative forms of finance

  • Chinese and Japanese Leasing (as well as
  • ther, e.g. Korean)

PETROFIN RESEARCH

www.petrofin.gr

January 2019

slide-9
SLIDE 9

Chinese Leasing

Source: Marine Money

January 2019 PETROFIN RESEARCH

www.petrofin.gr

slide-10
SLIDE 10

Chinese Leasing

Chinese Leasing Houses backed by

Major Banks Shipyards Investment Companies Industry Leaders ICBC CSIC Leasing CHINA HUARONG AVIC INTERNATIONAL Leasing CCB CIMC Finance China Minsheng Investment TAIPING & SINOPEC Financial Leasing Bank of Communication Finance Leasing COSCO SHIPPING Leasing FAR EAST HORIZON ABC Financial Leasing China State Building Corporation Leasing China Development Bank Leasing Minsheng Financial Leasing

(currently seeking to sell more than $1.1bn-worth of its ship finance portfolio)

Source: Marine Money

PETROFIN RESEARCH

www.petrofin.gr

January 2019

slide-11
SLIDE 11

Japanese Operating Lease with Call Option (JOLCO)

The JOLCO is a tax-driven leasing structure funded by equity investment from a Japanese entity with non-recourse senior debt provided by an

  • n-shore bank. The structure provides 100% financing at relatively attractive rates over a relatively long term. The 100% funding feature makes

this a favourable product despite the lessee having to bear any change of law that may put the structure and its benefits at risk. Source: Marine Money PETROFIN RESEARCH

www.petrofin.gr

slide-12
SLIDE 12

Debt and Equity Markets

  • It has been estimated by Fearnley’s that $7.9bn has been

raised in 2018 of which bonds are approx. 60% and equity

  • approx. 40%
  • The value of the global fleet is estimated at about $790bn

(graph below)

  • The Debt and Equity markets, therefore, for 2018, have

contributed 1% of the global fleet value, a rather small contribution

  • Reasons for relatively small contribution

PETROFIN RESEARCH

www.petrofin.gr

January 2019

slide-13
SLIDE 13

Value of World Fleet

$207,409,000,000 $194,585,000,000 $122,877,000,000 $75,819,000,000 $75,535,000,000 $30,628,000,000 $30,310,000,000 $29,635,000,000 $17,751,000,000 $2,833,000,000 $696,000,000 $160,000,000 $11,000,000 Bulkers Tankers Containers MODU LNG Small Dry LPG OSV OCV Reefers Multigas Combo OCV other

Total World Fleet Value according to Lloyds’ List Outlook 2019: $788.25bn

PETROFIN RESEARCH

www.petrofin.gr

January 2019