It seems the time has passed for the shipping industry to wave farewell to veteran analyst David Lepper. Mr. Lepper has maintained a post at UBS, but has moved on from the shipping markets into small cap.

Hypovereinsbank yesterday held its 7th annual client dinner for the Norwegian markets at the scenic Holmenkollen Park Hotel. The dinner was well attended, with representation from ship-owners in Bergen, Oslo and Sandefjord, as well as from Aker Yards and other good clients.  During the dinner it was announced that they have increased their staff in Oslo by bringing Mr. Wolfgang Drescher from their Hamburg office to Oslo to support Ms. Susanne Mertens, who has been active there for the past three years. Mr. Drescher has been covering the bank’s marine equipment finance industry, which is one of the four products on which the bank focuses. Today, the bank offers services within ship finance, offshore finance, marine equipment finance and shipyard consulting. With Wolfgang’s 14 years of banking experience, he should be well equipped to service the Norwegian market.

London-based ship finance boutique Tufton Oceanic has hired Mr. Mas Gram, who started work last week. Mr. Gram, a Norwegian who recently received his MBA from Instituto de Empresa in Madrid and, spent three years with Tankers International, where he was a part of the starting team and ended up as marketing and project manager for the company. Mr. Gram will be working on deal execution for Tufton, and we wish him good luck.

The results were so interesting last year, we just couldn’t pass up the chance to do it again! Following this are a few of the highlights; look for a full discussion and analysis in the April issue of Marine Money, including information regarding the geographical dispersion of our respondents and the breakdown of their portfolio sizes.

To give you a taste of what is to come, Figure 1 shows the breakdown of return on equity targets for our respondents and the corresponding success rates. Not too surprisingly, success rates were very high in 2004, with 92.3% of those responding meeting or exceeding their targets. What is a little more interesting is the correlation we witness among respondents between target ROEs and achievement rates. While it might be expected that banks who set their sights higher achieve higher ROEs, it is certainly worth taking note that, at least in 2004, banks who set higher goals also had a better chance of obtaining those goals.

Figure 2 demonstrates that our respondents are significantly more comfortable offering higher advance rates than in offering unsecured financing in exchange for higher yields. In fact, a full 84.4% of respondents would consider offering higher advance rates under some circumstances while only 63.3% would even consider doing this with unsecured financing.

Figure 3 shows us something we might expect to see: borrower spreads have been falling almost across the board, keeping pace with falling interest rates to make debt in many cases ridiculously inexpensive. Over two thirds of respondents saw spreads fall by 10% or more, and only a modest 4.0% actually saw spreads increase. Transportation specialist DVB Bank did announce with its earnings release that it partook in the industry-wide trend towards falling spreads, but shipping loans made by that bank were on average just four basis points cheaper to borrowers than those made in 2003.

Figures 4a and 4b give an important indication of how shipping bankers are responding to the industry’s turn to the equity markets. Over a third of respondents think that the plethora of shipping IPOs that have been coming to market are good for the industry; they do, after all, increase exposure and spread risk while increasing the variety of sources of capital available to shippers. Almost a fifth of respondents, however, felt that the IPOs are definitively bad for the industry. One valid complaint we have heard is the extent to which the purchase price of ships with public money inflates values, to some extent driving other sources of capital out of the industry. Whatever they think about the IPOs in general, the bankers who responded had an almost universally dismal view on the DryShips IPO, with only 2.7% responding that they would be completely comfortable buying shares in the company with their own money. A whopping two thirds would absolutely not purchase shares. To be fair most, however, results were gathered prior to a number of Economou’s most recent acquisitions and a Jefferies report that rated the company a BUY.

Finally, Figure 5 shows the breakdown of respondents’ risk tolerance for single hull tankers as compared to bulkers built before 1985. While the bankers do not seem particularly keen on either type of asset, with only half of respondents willing to consider financing an elderly bulker while less than 40% would even consider financing a single hull tanker. This is reasonable considering the different types of risk the vessels face. An older bulker may require more maintenance, and there is always the risk that it will not last as long as expected. Single hull tankers, however, widely vilified as the willful culprit behind oil spills in North America and Europe, face not only an IMO phase-out, but legislation from the E.U., the U.S., and other governing bodies that could have the effect of wiping them out of service permanently sooner than planned. Of course, this results in the upside that single hull tankers are for the most part profitable in the current market while affordable compared to most tanker assets, which is no doubt the reasoning of the 40% of respondents who would still finance such a vessel under the right circumstances.

Untouched here are such topics covered by the survey as portfolio change, credit limits, average spreads, future expectations, and banker salaries, among a variety of others. Additionally not included is a breakdown of responses based on target ROE and success in achieving targets. All this and more will be covered in the April issue of Marine Money, so we hope to have caught your interest.

Merrill Lynch Capital Equipment Finance National Sales Manager Randy House announced today that Ravi Dandapani has joined Merrill Lynch Capital as Vice President, Marine Market Manager. Most recently, Mr. Dandapani served as Managing Director for Global Origination of Maritime Structured Products at Citigroup, and he has also worked as Vice President for maritime financing and business development at the CIT Group. All told, he has over 33 years of experience throughout both the operating and financing sides of the marine industry. This marks a second important move by Merrill Lynch to beef up its shipping personnel as it begins to make inroads into the industry. Congratulations to Mr. Dandapani and to Merrill Lynch!

Athens-listed ferry company Blue Star Maritime SA is currently in the market for a Euro 200 million refinancing of an existed syndicated loan as well as other smaller facilities. Citigroup is serving as sole bookrunner and arranger on the deal. The Panagopoulos family-affiliated company also recently reported 2004 consolidated net profit of Euro 10.9 million, 130% higher than the Euro 4.7 million reported in 2003.