Shipowners this year have one of the best opportunities in recent memory to finance their fleets, according to a new study from oceanis, a Hamburg-based ship finance platform
Strong earnings across sectors, coupled with a flood of cheap money from quantitative easing efforts, have pulled more banks and more investors into shipping after the pandemic. The increased competition that resulted, caused leverage to rise and margins to shrink across all vessel types, and is now most clearly seen in dry and tanker financings, according to oceanis, as banks attempt to rebalance their portfolios away from container vessels.
Product tankers are “in vogue” with financiers according to oceanis with loans at over 100% of historic fair market value (FMV) possible for pool-trading mature vessels.
Likewise, the strength in the offshore sector is bringing international banks back after a decade of write-downs and restructuring.
Erlend Sommerfelt Hauge, managing director of oceanis, said: “The improving credit of shipowners over the past three years, coupled with heavy repayments on container financings, have generated immense competition between financiers. At the same time, rising base rates are making higher-leverage financings comparatively cheaper, creating more competition for banks. Now is one of the best times in recent memory to finance your fleet.”
One area where money is drying up this year is in the previously buoyant container sector. The most prominent banks are looking to reduce their container portfolios and are now seeking to finance only those vessels employed by very strong charter counterparties and at today’s lower valuations with oceanis reporting there have already been some “soft defaults” in the sector.
