Export-Import Banks in Action

Export finance continues to be a major source of financing for the shipowners and the momentum appears to be gaining pace. According to local reports, the Export-Import Bank of Thailand (“EXIM Thailand”) has announced plans to lend at least THB 18 billion (USD 563 million) to local shipping companies in their acquisition of new tonnage. The government hopes that the latest measures will help to expand the Thai fleet and reduce reliance on foreign carriers, and in turn generate more foreign exchange earnings for the country.

EXIM Thailand has the ability to offer direct loans or arrange syndication deals with its financial partners for the domestic shipping companies and is looking at extending loans of up to THB 18 million over the next three years. In January 2010, Precious Shipping secured a credit facility granted by EXIM Thailand and other lenders including Bank of Tokyo Mitsubishi UFJ, Bank of Ayudhya, Kasikornbank and Thanachart Bank for the acquisition of bulk carriers. Continue Reading

Precious Shipping

It may not be fresh news anymore, but we thought it would be interesting to take a closer took at Precious Shipping’s USD 250 million featured among Dealogic’s Top 15 Shipping Loans in 1Q2010. In January, Thailand’s dry bulk shipping company Precious Shipping secured a new USD 250 million secured term loan facility with a syndicate of lenders comprising Bank of Tokyo Mitsubishi UFJ (“BTMU”), Bank of Ayudhya, Kasikornbank, Export-Import Bank of Thailand and Thanachart Bank, making this possibly the second largest shipping loan in Asia in 1Q2010. This transaction was led by BTMU’s team in Singapore, which demonstrates the bank’s strategy in using Singapore as a platform to widen its geographical reach.

Precious Shipping will be making use of the loan facility to finance up to 60% of the dry bulk ships (details in the accompanying table). The company has recently concluded its plan to sell its oldest 25 ships and is in the process of rejuvenating its fleet by acquiring younger and bigger vessels. In addition to the two second-hand ship purchases, Precious Shipping has contracted 18 brand new ships at ABG Shipyard in India and signed long term charter contracts for three cement carriers. Continue Reading

A Noble Breed

Last week, our sister publication Freshly Minted reported on Maersk’s successful EUR 750 million (USD 1.3 billion) five-year bond. This was the shipping conglomerate’s first bond issuance, following a recent equity offering of USD 1.7 billion. In Asia, commodity trading house Noble Group has likewise found tremendous success in raising funds, suggesting that investors and bankers are getting warmed up to investing cash again. Continue Reading

Precious Money

Shipowners continue to face difficulties in securing financing, but for the fortunate few there exist some pockets of liquidity, albeit at smaller amounts. Thailand’s Precious Shipping has successfully negotiated for an extension of its credit facility from Krung Thai Bank and two other local banks for the baht equivalent of USD 250 million. This follows closely its earlier announcement that it had renewed its secured revolving loan facility agreement with DnB NOR Bank, Singapore branch and two undisclosed lenders. The two facilities will provide Precious Shipping with up to USD 350 million for the acquisition of second hand vessels.   

In the latest transaction, Krung Thai Bank, Bank of Ayudhya and Siam City Bank have extended its facility till 18^th January 2010 but not without some amendments. The facility amount was lowered from USD 300 million to Thai Baht equivalent of USD 250 million (Baht 8,750 million) and the currency of the facility was changed from US dollar to Thai Baht. This seems to suggest the local banks are still facing difficulties in financing long positions in US dollars. Precious Shipping will therefore have to assume the risk of an appreciating US dollar against Thai Baht at the time of the drawdown. The facility is priced at the minimum lending rate minus 1% with a commitment fee of 1% per annum on undrawn loan amount. Continue Reading