Deal of the Year – 2002 Bank Debt

Determining the bank debt deal of the year is usually the most challenging of all the awards we give. Of the hundreds of revolvers, term loans and refinancing totaling about $40bn done for the shipping industry each year, it is generally very difficult to determine a winner – but this year it was easy.

This year’s Bank Debt Deal of Year award goes to Citigroup, the Korea Development Bank and the Korea Exchange Bank for the $1.05bn facility that they arranged to finance Wallenius Wilhelmsen’s (WW) acquisition of Hyundai Merchant Marine (HMM)’s car carrier business, including the term charters with Hyundai Motors and Kia Motors (HMC/KMC). The NewCo, known as “Korea Ro-Ro”, is to be jointly owned by Wallenius 40%, Wilhelmsen 40% and HMC/KMC 20%.

There were several things we liked about this deal. Perhaps more impressive that its sheer size was the fact that it attracted more funding from foreign lenders than any previous Korean leveraged deal. This Norwegian/Korean transaction was also extremely complex, requiring securitization of cash flow streams into three tranches with multiple security packages and pricing.

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