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Thursday, 27 February 14
SHIPPING LOANS WORTH $5 BILLION HAVE CHANGED HANDS OVER THE PAST YEAR, AS FUNDS INVEST IN SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Funds investing in shipping has been the "talk of the town" over the past couple of years, as institutional investors, private equity and hedge funds have all emerged as newcomers to the shipping financing segment, often assuming the role of traditional shipping banks, which have exited the market, or cut their exposure. According to the latest weekly report from shipbroker Intermodal, the vast majority of those funds have been consumed in buying up shipping loans. "About $5 billion in shipping loans have changed hands in the past year and demand is driving loan prices to levels almost in line with book values", said the shipbroker.
According to an analysis by Intermodal's SnP broker George Dermatis, these funds "do not hesitate taking over entire fleets and even align themselves with several managers in an insatiable escapade to take over debts and even ships/assets on their balance sheets. Funds tolerate systemic risk much more than traditional banks that are massively exiting or reducing their exposure in the sector. So one could argue that one player is filling up the void the other creates. Therein lays the paradox" he noted.
Dermatis said that "the characteristics of traditional banks are undoubtedly much more to the liking of traditional shipowners; no exit strategy other than full debt repayment, name lending based on interpersonal relationships, which in some cases dates back decades, experience over several shipping cycles and the list goes on. The industry perceives this as an overall alignment of interests. Private Equity funds stand more or less at the other side of the road on all of these points and that creates nervousness to most being afraid of how fast these investors can climb the learning curve or lose their interest in the process".
According to the broker, "the truth is that shipping largely remains in the hands of its professionals, who live and breathe the essence of this sector and who -to a large extent- have assigned a negative connotation to the publicity that funds along with capital markets and OTC offerings gather. So, despite the fact that financing from these sources has in many times arrived when no other source of funding was available, the truth is that our industry still views them with skepticism. My personal feeling is that people spend too much time “loving or hating” a way of financing whose significance has been grossly overestimated - at least for the time being", Dermatis mentioned.
He went on to add that "despite the fact that numbers -especially last year's- are indeed impressive, it seems that equity funds do not contribute more than $6-7bn on average per year, which seems like a drop in the ocean when compared to conventional debt financing by banks which continues to provide around $250bn annually according to Marine Money. During the peak times of 2008, these figures stood close to $500bn (!!!) and this should therefore be sufficient to hush down fears that private equity alone could lead to a bubble or that it could even distort market reality... The main worry linked to overcapacity remains and the finance gap on newbuilding orders persists if not broadens. The latest available data speaks of figures of over $125bn... Whilst the presence of “new” money is duly noted, we all need to realize that the industry must be able to carry its own weight. If that means changing our processes, transparency levels, corporate responsibility standards, etc. in order to bridge this gap and attract a greater share of their attention, then maybe this is a change we should embrace", Dermatis concluded.
Meanwhile, in the dry bulk market this past week, things continued to improve on the back of rates for the smaller size segments holding on to their levels and those for Capes correcting upwards, said Intermodal, while the spill-overs of the improved sentiment have yet to affect the Panamax market. Nevertheless, the BDI ended yesterday on yet another higher note, ending the session at 1,222 points.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Monday, 31 March 14
CFR SOUTH CHINA COAL SWAP FOR Q2 14 DELIVERY LOST 1.17% M-O-M
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 1.17 percent month on month and closed at US$ 75.38 per m ...
Sunday, 30 March 14
FREIGHTS FROM INDONESIA TO INDIA IS EXPECTED TO BE SOFT NEXT WEEK - REDDY
COALspot.com: The freight market dropped drastically and all sectors were affected severely.
The BDI was down by 14.13 pct and closed at 1, ...
Friday, 28 March 14
US PRODUCED APPROXIMATELY 18.9 MMST IN A WEEK - EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal i ...
Friday, 28 March 14
CHINA'S ENVIRONMENTAL MEASURES WILL NOT CURB GROWTH IN DOMESTIC STEEL PRODUCTION AND SEABORNE IRON ORE - WOOD MACKENZIE SAYS
Steel plants in China have been targeted as a major source of the toxic smog enveloping Beijing and Shanghai. Emergency measures have been impos ...
Thursday, 27 March 14
PANAMAX : SEEMS TO HEAD FURTHER DOWN; CAPESIZE : ANOTHER CHOPPY AND UNPREDICTABLE WEEK - FEARNLEYS AS
Handy
A weaker sentiment for the smaller size as well, with reduced activity in the Atlantic where Owners have to face significantly lower ret ...
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- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Indian Energy Exchange, India
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- TNB Fuel Sdn Bhd - Malaysia
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- Independent Power Producers Association of India
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- Toyota Tsusho Corporation, Japan
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- Australian Commodity Traders Exchange
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- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
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- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
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- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
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- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
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- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
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- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
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- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Antam Resourcindo - Indonesia
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- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
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- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
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- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
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- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
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- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
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- Sakthi Sugars Limited - India
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
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- Cement Manufacturers Association - India
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- Tamil Nadu electricity Board
- Romanian Commodities Exchange
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- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
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- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
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