Wintermar Offshore Taps IFC Loan

On Tuesday, Indonesian offshore company Wintermar Offshore Marine signed a USD 45 million with IFC for the expansion of infrastructure services in the country’s oil and gas industry. IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector.

IFC’s loan to PT Wintermar Offshore Marine Tbk, the largest Indonesian provider of support vessels to the domestic oil and gas industry, will assist in funding the company’s plan to add 15 supply vessels to its fleet over the next two years. The expanded fleet will support the exploration and development of new offshore oil and gas fields, particularly in eastern Indonesia, to help the country meet growing energy needs. The gradual implementation of cabotage regulations and rising activity level in the Indonesian offshore energy industry have led to higher demand for Indonesian-flagged offshore support vessels. Continue Reading

Wallenius Wilhelmsen JV Builds and Finances in Japan

Norwegian operator Wilh. Wilhelmsen ASA has recently signed a new USD 55 million buyer’s credit agreement with Japan Bank of International Cooperation (“JBIC”). The Norwegian operator will use the proceeds to finance the construction of a pure car/truck carrier (“PCTC”) ordered at Mitsubishi Heavy Industries (“MHI”) in 2010. JBIC will commit USD 27 million to the facility, with the remaining amount to be co-financed by Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp. Nippon Export and Investment Insurance (“NEXI”) will provide the commercial lenders buyer’s credit insurance of USD 27.4 million that covers 97.5% political risks and 95% commercial risks.

The vessel is one of the two PCTCs that Wilh. Wilhelmsen and partner Wallenius Lines ordered in 2010. Wallenius Lines’ Singapore subsidiary secured similar funding agreement with JBIC and NEXI for its PCTC back in September 2011. BTMU was the sole arranger in that particular transaction. Each vessel has a capacity to transport 6500 car equivalent units and will be sister vessels of ten PCTCs delivered from MHI in the period 2004-2009. Continue Reading

Shipbuilders Get Domestic Support

China Rongsheng Heavy Industries (“China Rongsheng”) has proved to be a clear favourite among Chinese banks, after securing (yet again) another massive facility with China Development Bank (“CDB”). On 22 December 2011, the Hong Kong listed shipbuilder signed a USD 100 million loan facility with CDB, Hong Kong branch. The offshore USD dollar loan marked a significant milestone for CDB Hong Kong that was set up in 2009 as the bank’s launch pad to serve Chinese enterprises
internationally.

One of Taiwan’s largest private shipbuilders, Jong Shyn Shipbuilding, had also found similar success with the domestic lenders, having inked a TWD 1.2 billion (USD 39.7 million) five year syndicated facility through joint bookrunners and mandated lead arrangers – Taichung Commercial Bank, Taiwan Business Bank, and Taiwan Cooperative Bank. Agricultural Bank of Taiwan, Bank of Kaohsiung, Bank SinoPac, Chang Hwa Commercial Bank, Cosmos Bank Taiwan, Hua Nan Commercial Bank and Shanghai Commercial & Savings Bank took part as participants.  Continue Reading

HMM Seals USD 500 million Debt Facility

Hyundai Merchant Marine (“HMM”) has demonstrated that even during times of economic uncertainty, reputable ship owners with good track records are still able to tap the banking market. Last Tuesday, HMM concluded a USD 500 million syndicated debt facility led by DNB Bank. Other participating lenders include ABN AMRO, Credit Agricole, Korea Finance Corporation and Korea Development Bank. The facility will be used by HMM to fund the construction of five mega container vessels being built at Daewoo Shipbuilding & Marine Engineering which are scheduled to be delivered throughout 2014.

DNB says the latest transaction underlines the bank’s continued commitment to shipping throughout the cycle. In an earlier report, J.P. Morgan analyst Sofie Peterzens pointed out that the bank is well positioned to absorb potentially higher shipping losses from a profitability and capital perspective. With only 7.7% of total lending to shipping, a well diversified loan portfolio and LTVs averaging 60-75%, Ms Peterzens believes that DNB’s exposure to the sector is manageable.

Banking Crisis? Not an Issue for BW Group or NOL

2012 is broadly expected to be challenging for both shipping lenders and borrowers. As long as the Euro debt crisis persists and continues to worsen, capital will become increasing scarce. Even shipping companies at the top of the pyramid are busy strengthening their balance sheets and making sure that they have adequate funds to meet capital expenditure requirements in the coming years.

One of the world’s leading maritime companies BW Group has successfully completed a USD 1.5 billion seven-year revolver in mid-November. According to market sources, the proceeds will be used for refinancing and the participants are largely from the previous revolving facility. Pricing is said to be “slightly higher” than the previous revolving facility, although it remains highly competitive in today’s tight market conditions. Continue Reading

KAMCO – A White Knight for Korean Shipping

There are many intrinsic reasons for governments in Asia to formulate policies to support their domestic shipbuilding industry, either through direct loans to the yards or their clients. The shipping sector, however, has in sharp contrast, failed to benefit in the same way, with the exception of South Korea. As a resource-poor country, South Korea recognizes shipping as strategically vital to the nation’s economic wellbeing. During the Asian financial crisis in the late 1990s, cash strapped Korean shipping companies sold 112 ships at distressed prices to foreign buyers and as a result, the country had to grapple with the repercussions from the loss of its national fleet. This painful lesson has strengthened the nation’s determination not to allow history to repeat itself, at a time when shipowners are once again facing huge challenges on multiple fronts including a weaker demand due to the current acroeconomic uncertainly, capacity glut across all vessel types and rising bunker costs.

Armed with the mission to assist in the restructuring or liquidation of distressed assets, Korea Asset Management Corporation (“KAMCO”) has been playing a vital role in alleviating domestic shipping companies from a liquidity crisis. In 2009, the state-run financial restructuring agency established a maritime fund, designed to help shipping companies reduce their capital costs on their vessels. Since then, KAMCO has acquired 27 vessels of over USD 720 million directly from the shipping companies. This strong (and unprecedented) support for the shipping sector has allowed South Korean shipping companies to weather the after-effects of the Lehman crisis. Continue Reading

JBIC offers NYK loan facility

Export Credit Agency, Japan Bank for International Cooperation (“JBIC”) is leading a syndicated loan for mega carrier Nippon Yusen Kaisha (“NYK”) for the acquisition of a LNG carrier. The vessel will be built by Mitsubishi Heavy Industries and will be placed on a long term charter with Tokyo Electric Power Co (“TEPCO”) upon delivery. JBIC has committed JPY 12.6 billion (“USD 162 million”) to the facility, which we understand is not the entire amount. Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp chipped in as participants in this project finance transaction.

The vessel is rumoured to cost NYK JPY 20 billion (USD 258 million). NYK has a 15 year agreement plus an option to extend for another 5 years with TEPCO for the transportation of natural gas into the country.

Standard Chartered finances two OOIL’s boxships

Standard Chartered has agreed to finance two new 13,208 TEU containerships for Orient Overseas (International) Ltd (“OOIL”). Not much detail was disclosed by either party, except that Standard Chartered was the sole arranger for the deal and the two vessels are scheduled to be delivered in 2013. In the press release, Tung Chee-Chen, OOIL Chairman pointed out that the vessels will be the biggest in its fleet upon delivery and OOIL remains convinced that the investment in these ships will ensure its competitiveness and “this is the right time to invest”. During the first half of 2011, the company placed orders for ten 13,208 TEU vessels from Samsung Heavy Industries for delivery in 2013 and 2014.

Update on Evergreen Marine’s USD 824 million loan

A few more details have emerged on Evergreen Marine’s recently concluded USD 824 million syndicated facility. The loan, which was made up of two USD 247 million tranches and a USD 330 million tranche, was secured through its three subsidiaries Evergreen Marine Corp (Taiwan), Evergreen Marine (UK) and Evergreen Marine (Singapore). According to sources, the pre-delivery loan components were priced at 95 bps above LIBOR and the post-delivery portions were at 90 bps in excess of LIBOR. The facility was also structured in such the way that should the difference between Taiwanese inter-bank rates Taifx and LIBOR exceed by 35 bps, Evergreen will have to pay the lenders the excess over the 35 bps spread differential.

The syndicated loan, payable over ten years, was arranged by Bank of Taiwan, Land Bank of Taiwan, Taiwan Cooperative Bank, Taipei Fubon Commercial Bank, E.Sun Commercial Bank. Chang Hwa Commercial Bank, First Commercial Bank, Hua Nan Commercial Bank and Mega International Commercial Bank joined in as participants. Proceeds will be used to finance the construction of ten 8,000 TEU post-panamax containerships ordered at Taiwanese shipbuilder CSBC Corp for USD 1.03 billion in May 2011. Continue Reading

OCBC Provides Mezzanine to GO OFFSHORE

GO Offshore, Otto Marine and OCBC Bank have entered into indicative term sheet for a mezzanine loan of up to USD 20 million by OCBC with an option for OCBC to subscribe for new ordinary shares in GO Offshore or its listing vehicle for up to the facility amount. GO Offshore is a wholly-owned subsidiary of GO Marine Group, a company in which Otto Marine has a 19% shareholding and an option to acquire a further 81% shareholding.

Under the term sheet, the mezzanine loan will be repayable by GO Offshore at the earlier of (a) 36 months from the first drawdown date or (b) the occurrence of a “liquidity event”. A “liquidity event” includes an initial public offering by GO Offshore or its listing vehicle and the sale or transfer of all or substantially all the assets of GO Offshore. The facility will commence on the date of the definitive facility agreement to be entered into between GO Marine and OCBC and will expire 36 months from the first drawdown date. Continue Reading