All Eyes on China

In the last edition of Marine Money Asia, we reported that Yantai Raffles has secured USD 150 million from China Development Bank. This week, we have another transaction that involves a Chinese bank supporting Chinese shipping interests. Bank of China (“BOC”) has sealed a cooperation agreement with state owned China State Shipbuilding Corporation (“CSSC”).

Under the terms of the agreement, BOC will provide CSSC a credit line of RMB 80 billion (USD 11 billion) to support the latter’s businesses in shipbuilding and ship repair. In addition, BOC will leverage on its buyer credit business to support CSSC’s exports. BOC has been an instrumental player in the development of the Chinese shipbuilding industry. All in all, the bank has provided domestic shipbuilders with over RMB 130 billion (USD 19 billion).

Yantai Raffles in USD 150 Million 3-Year Loan from China Development Bank

Demonstrating that Chinese banks are supporting Chinese shipping interests on more than just an as-needed basis, Yantai Raffles Shipyard last week announced the signing of a facility that would be used primarily to retire more costly, existing bank debt and for working capital. The three-year facility will be provided by China Development Bank. Yantai Raffles Chairman Mr. Mai Bo Liang noted that the new deals fulfills strategy goals including establishing and building upon key banking relationships in China and replacing short-term bank lines with committed, longer term, competitively-priced funding arrangements. While specific terms were not disclosed, the general description sounds more like something out of 1H07 than 1H09 and illustrates the importance geography, nationality and relationships will play in the ship finance market going forward.

 The transaction follows closely behind a cooperation agreement with one of Yantai Raffles’ largest shareholders, China International Marine Containers (Group) (CIMC), and CDB, in which CDB has provided CIMC with credit facilities up to RMB 6.5 billion, or USD 1 billion. Incidentally, Yantai Raffles has over 4,000 employees.

Let the Stakeholders Speak

During our conference in Hong Kong, the panel titled “Stakeholders Unite: Owners, Investors & Lenders on What Comes Next” generated a lively discussion on the many issues revolving around shipping today including the role of private equity in shipping, China’s increasing dominance in the global supply chain and the funding gap of the global orderbook. We bring you some of the highlights.    Continue Reading