Good Faith Shipping Two years on

By Kevin Oates

Many Greek shipping companies bought what turned out to be expensive dry bulk vessels in 1997 and 1998. The boom market of 1995 and 1996 had long gone and the expectation was the market was stable and about to turn. How wrong they were. Unexpectedly for owners, banks and brokers alike the Far East economies crashed and this had a long and devastating effect on dry bulk shipping. Values reduced by 40% in a year and the freight market tumbled.

At the same time in 1997 and 1998 Wall Street was hot and money plentiful. Where better to get a great return than from Greek shipping companies who were willing to pay above average on their high yield coupon. Transatlantic flights were full and Akti Miaouli was looking like a Manhattan mid-town football pitch (if there are any!!!). Who would be first to get on the bandwagon? What rating would they get? What coupon would they get? The flurry culminated in several bond issues by Greek shipping companies between November 1997 and May 1998. And then the market changed.

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