Hamburg-based digital ship finance specialist Oceanis has launched Pythia, something it describes as a “loan oracle”. The service is a free, quick assessment on the likelihood of obtaining debt financing for any project.
“What a senior banker performs in his head over a lunch or dinner is now accessible online. Pythia provides information to shipowners not only on the current attractiveness of their project, but also on how to make each project more attractive to the lenders,” the company explained in a release.
With over 40 financiers onboarded from traditional European banks to Asian leasing houses and American alternative debt funds, the platform is capable of serving all types of owners and projects.
Shipping’s lack of transparency makes it hard to get information on loans, Oceanis argues. In corporate debt markets, by contrast, estimates of loan terms are available through following yields on similarly rated public companies while the interest payable on personal finance products such as home mortgages or auto leases are freely advertised for consumers to compare products. Crucially, all three of these sources of information can be detailed before approaching a bank for these products.
Many reasons exist as to why shipping stands apart: the complexity of multiple jurisdictions, the varying build quality between yards, the cost of special surveys and recycling values to name a few. These and a host of other important considerations make the shipping industry one of the most complex financing areas in the world, therefore making it one of the most difficult areas in which to accurately predict loan terms.
Given the many individual factors which might make a borrower uniquely well- or poorly-suited to the lending conditions of the moment, and the variable degree to which financiers value them, it has to date been challenging for owners to accurately predict financing terms ahead of a due diligence process with any degree of accuracy.
With the launch of Pythia, Oceanis has sought to distill the key variables which form the core of any bank project evaluation, aiming to streamline and speed up the road to drawdown.
Completing a short two-minute online form, shipowners can gain instant insights on the feasibility of their project for financiers and receive advice on how to make those projects more attractive.
Maximilian Otto, managing partner, told Splash that the two most restrictive items for small and mid-sized owners tend to be a lack of sufficient equity and a focus on single vessel projects resulting in small ticket transactions. This is changing this year with the upswing in fortunes for the container and dry bulk sectors.
“In today’s environment it’s no longer only about access but about knowing the right structure in order to receive the most favourable terms and react quickly to market opportunities,” Otto said, adding: “The current market dynamics are shifting power towards the borrowers. In order to make the most of the current cycle it is of paramount importance to perform a thorough market screening.”