Finanzierung | Financing »We have all become a little more reasonable« For those lenders who have remained in the marketplace, the times are different from the glory days of 2005 to 2007. Financers have become more reasonable but new entrants to the sector are not always satisfied with the situation, reports Barry Parker Alexander Oetker, A.O. Shipping Michael Parker, Citibank Aaron Sen, Mount Street Group © Marine Money Marine Money 2019, held in its traditional late June time slot – in its venue in New York’s Hotel Pierre – saw record attendance this year. The composition of attendees changes each year – reflecting the vicissitudes of both the shipping market, and of capital providers. Teams of delegates from European banks that have continued to finance shipping, as well as representatives from new capital sources were out in force – listening intently to presentations during the three day event. This year’s discussions included an overview of the varied debt sources, as well as a discussion of an important aspect of the markets that has developed in the past decade – that of shipping loan portfolios that have changed hands. For those lenders who have remained in the marketplace, the times are different from the glory days of 2005 to 2007, before difficulties in the finance markets, coupled with inherent volatility and invariable downturns in shipping markets led to a winnowing of shipping banks. Just to benchmark the commercial banks, Martin Lunder, Senior Vice President, running Shipping and Offshore at Nordea in New York (speaking at a private post conference brunch event hosted the day after the conference) noted that leverage on typical deals ranged between 50% to 60%, with margins of up to 400 basis points over Libor. Banking league tables reveal that Nordea, a sector stalwart, had a shipping/offshore portfolio of a little more than 10bn$, equivalent, at end 2018. Andy Dacy, from the investment side of JP Morgan offered that »we have all become a little more reasonable regarding what the return should be. There are reasonable ways to play the business that make reasonable returns, which could typically be in the high single digits or perhaps the low single digits. But new entrants to the sector are not satisfied with single digits.« Randee Day, a long time banker and veteran of numerous restructurings, now with Goldin Maritime (an advisor), told the panel, »banks have constantly mis-priced shipping risk …« pointing to this failure in pricing as »the reason that global shipping portfolios are half of what they were a decade ago.« For banks, versatility is key. Christos Tsakonas, Head of Shipping at DNB, on a credit panel, said that »it’s extremely difficult for banks to make money just by lending. It’s extremely important to have ›ancillary‹ products, a whole suite of products. Examples are diverse capital market products that could play a role a role at different parts in the cycle.« But many banks pulled out of ship lending, in the years 2008 to 2019. Speaker Richard Jansen, from Braemar Naves Corporate Finance, reviewed the big picture (noting sales of loans, starting in 2013, by Commerzbank, HSH, Deutsche Bank, NordLB and others), further offering that we should expect to see additional sales of shipping loan portfolios from European and some Asian institutions. He pointed to hybrid portfolio sales, such as »Big Ben«, a 2.6 bn € sale of loans from NordLB to the Cerberus investment fund, and the now cancelled »Towerbridge«, where Nord- LB will keep loans in-house. Importantly, he suggested that in deleterious state of the markets for offshore vessels (weakened, without significant recovery, since the oil glut of 2015) loan sales could be expected in that sector – although the wave is »not quite upon us, yet.« 20 HANSA International Maritime Journal 08 | 2019
Finanzierung | Financing »Change has just begun« One consequence of commercial banks exiting ship lending is that maritime loan portfolios have been, and continue to be, sold on a wholesale basis. One of the most knowledgeable participants in this arena, ex NordLB shipping banker Aaron Sen, who recently moved over to »loan servicer« Mount Street Group, brought insights into this burgeoning corner of shipping finance. In describing ongoing trends, Sen explained that »investors are lending directly to the industry, we also have seen this in property.« He added: »A change of landscape in the shipping industry has just begun… There will be a big need for ›loan service‹ infrastructure, also infrastructure for taking laid off bankers on board.« Sen’s team includes more than a dozen bankers previously working with European institutions that have exited ship lending. Throughout the three day Marine Money event, »Alternative Finance« – high yielding debt, mezzanine type funding, or debt with equity »kickers« – received considerable mention. One new provider is RMK Capital, whose Managing Director Michael Kirk spoke about his firm’s efforts to offer loan products aimed at older vessels »that are more expensive than bank debt, but less expensive than hedge fund debt.« He said: »We want these loans to be boring,« and added that »we’d need to be reasonable on Loan To Value (LTV), they would typically be 55% to 65%. Typically they would be five year loans, with probably 30% to 40% amortization over that term.« An undercurrent in various debt discussions throughout the week concerned efforts to tie company valuations (and also debt) to cash flows rather than asset values. Sebastian Blum, Director of Maritime Industries at KfW IPEX Changing Generational Perspectives Alexander Oetker, whose eponymous A.O. Shipping owns nine dry bulk carriers ranging from 58,000 dwt (Supramax) to 82,000 dwt (Kamsarmax), was one of the three panelists on a session examining issues surrounding multi-generational shipping families. The panel (with Oetker complemented by two members of prominent Greek shipping families) was moderated by leading ship finance lawyer Stefan Rindfleisch, Partner in Ehlermann, Rindfleisch and Gadow. Oetker, from a family well known in the foods business, detailed five generations of involvement in the maritime businessgoing back to the purchase of Hamburg Süd in the early 1950s. He confided: »As owners, we are relatively close together, but not when it comes to managing things.« In talking about the sale of Hamburg Süd to Maersk in 2017, he said that family dynamics were not consistent with the pressures of managing the business at a time of great consolidation in the liner shipping segment. Hamburg Süd – while still under Oetker family ownership – had already seen a redeployment of all capital into the container side of the business (and away from dry bulk and tanker investments). Around 2003, Oetker explains: »I said – why don’t I set up my own shop?« a move which was not supported within his family – but that he grew to understand over time. But as the cycle went full circle, he explained that he now owns two vessels jointly with his father. He said: »I had to go out, in order to get back in and get closer to them now.« He confesses to being »an old school« type of shipping man, with business preferably done by handshake with longstanding customers. But he acknowledged that, at some point, dry bulk shipping – a laggard when it comes to technology – and his company would have to reckon with the »digitalization« trend head-on. (a provider of export credit finance and credit support) expressed the view that »we support reliable long term credit with a good price. We think cash flow is important and we are not that focused on asset value. There needs to be a good credit.« This year, a new term »ESG Investing« (Environment, Sustainability and Governance) was mentioned more than once. Indeed, a major theme permeating the conference was that of sustainability and how the commercial banking community can be instrumentality of driving shipowners in the direction of lower emissions, where the International Maritime Organization (IMO) will be turning its attention. In conjunction with the Marine Money conference, the Global Maritime Forum hosted the inaugural session of the »Poseidon Principles« – where eleven European ship finance banks gathered to launch their effort. As explained by top shipping bankers from Citi, DNB and Societe Generale, the banks will strive to align their portfolio’s CO2 emissions profile with the IMO’s trajectory in reducing greenhouse gasses out to 2050. Implicit in the banks meeting their alignment objectives is the potential for allocating capital to more efficient ships (and away from financing vessels that do not help keep the bank’s portfolio in line with a target tied to the IMO) Besides these three institutions, initial members include ABN Amro, Amsterdam Trade Bank, Credit Agricole CIB, Danish Ship Finance, Danske Bank, DVB, ING and Nordea. The list of member banks is anticipated to grow; with additional European and Asian shipping banks expected to climb aboard. All told, the initial Poseidon Principle signers represent some 100 bn $ of shipping debt- approximately 20% to 25% (exact numbers are not known with precision) of all outstanding shipping loans. Law firm Watson Farley Williams (which was involved in drafting the Poseidon Principles language), told its clients in an end-June briefing: »The aim is that lenders, lessors and guarantee providers will take carbon intensity into account when considering the ships they are prepared to finance which will in turn encourage ›greener‹ ships that are aligned with the IMO targets.« They also note that »owners of nonaligned ships might find the pool of possible financiers is reduced as signatories try to ensure that their portfolios consist of ships that comply with the IMO greenhouse gas emissions targets.« n HANSA International Maritime Journal 08 | 2019 21
Offshore Hürden für Offshore-Wind
Offshore Tennet plant Strom-Inseln
Häfen | Ports »Je komplexer, des
Häfen | Ports EU sucht die golden
Häfen | Ports »Über die Hälfte
HTG Kongress 2019 11.-13.09.2019 in
HTG Fachausschüsse und Arbeitsgrup
Buyer’s BG HS 1908 Guide Buyer’
Buyer’s BG HS 1908 Guide Rohrleit
Termine freight & trade events worl
Letzte Seite uf einen Kaffee mit ..
MARCUS KRALL ......................