New York: In an increasingly constrained financial market, London is the financial centre best able to meet the funding needs of the transport industry, according to international legal practice Norton Rose’s recent transport survey. Singapore also makes the ranks of the top three global ship financing centres. Almost two-fifths (37%) of respondents from the global aviation, rail and shipping sectors ranked London as the key financial centre for transport, followed by New York (14%) and Singapore (7%).
The transport industry is continuing to explore alternative sources of funding, particularly the shipping sector, where respondents are most likely to report increased financial constraint. Almost a quarter (22%) of all respondents are using or considering using structured finance for the first time, especially in the shipping sector (26%) and the aviation sector (25%). Almost a fifth (18%) are using or considering private equity funding for the first time, with 23% of shipping sector respondents considering using this form of finance. Indeed, 26% of shipping respondents anticipate that private equity will be their primary source of funding over the next two years.
Harry Theochari, Global Head of Transport, Norton Rose, commented: “London and New York remain key financial centres for the transport industry but are looking over their shoulders at Asia which is growing in importance and continues to power forward. The industry, particularly shipping which has suffered the most from a lack of debt funding, continues to look at alternative forms of finance such as structured finance and private equity and there is evidence that respondents are increasingly able to meet their financing needs in their home markets, with a number of financial centres including Canada, Australia, Scandinavia, Switzerland and South Africa attracting the transport sector.”
Ben Rose, Partner, Norton Rose in Singapore, said: "Whilst many traditional shipping sectors remain depressed, we see continuing strong order and investor confidence in certain specialist sectors in Asia Pacific – most notably offshore assets and LNG. We have worked on a number of financings for such assets over the past year and see an increasing number of orders being placed in the region over the next year". [18/03/13]