Navigating Rough Waters: Survival Today, Success Tomorrow

Did you know…

·       Half of shipping bankers answering a survey last week would be comfortable financing a newbuild tanker…but 0% would be comfortable with a newbuild containership,

·       70% of these bankers expect shipping loan spreads to average over 300 basis points going forward…more than a third of these expect spreads to average over 400 basis points,

·       88% typically rely on LTV covenants – and half anticipate taking write-offs in 2009? Continue Reading

That Was The Week That Was

Marine Money’s flagship conference came to New York this week and if you were a kid you might refer to it as a three- ring circus. With the conference as the centerpiece, the week has become filled not only with the usual owner/banker meetings but formal presentations and the usual bevy of social events. The numbers are astounding with over 1,000 delegates registered this year, exceeding by far all previous years. In fact, as quickly as we printed a copy of the delegate list, we found it to be obsolete.

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Arabian Nights. Desert Sands. Phenomenal Opportunities.

What a great time we had in Dubai.  And the conference went well too!!!

Seriously, our First Annual Marine Money Ship Finance Conference held in the magnificent Grand Hyatt hotel in Dubai on 2nd February was a great success.  Over 167 shipowners, shipping bankers and shipping service executives spent the day with us.  All the major players from Dubai and the region were represented, as well as local and international financiers.  In terms of figures, over 60 representatives of shipping groups were there, 12 local and regional banks or financial institutions and over 15 foreign lenders.

We were honoured with keynote addresses by Mr. Sultan Ahmed bin Sulayem, Executive Chairman of Ports Customs and Free Zone Corporation, and Mr. Yusr Sultan, Board Member of GEM and CEO of Terminals, Shipping and LPG, Emirates National Oil Company.  The words that come to mind from both addresses are optimism, opportunity, pride, potential and quality.  Dubai is going places, and the government and major private players in shipping have plans for greater things to come. An internationally recognized state flag for the UAE is on the agenda.  The amount of local investment into shipping such a move could bring is astounding.

We heard from local and regional shipping companies who had taken a chance, used great initiative and then reaped the rewards – these included Emarat Maritime LLC and Emirates Ship Investment Co.  We were privileged to hear an enlightening presentation by IRISL (IR Iran Shipping Lines), a company with 87 vessels, more being built and expansion plans for another 40 vessels by 2007. IRISL cannot always get foreign finance because of the lack of a national credit rating by the international agencies.   To get around this, IRISL has set up a company in Germany that will own vessels, fly acceptable flags and be able to attract the type of investment and banking interest the company requires -forward thinking indeed.

Dubai Maritime City gave us an update on their plans to create a unique shipping service environment on land currently being reclaimed from the sea.  The area will house a shipyard and repair yard, commercial space for all shipping activities, a maritime academy, a marina and state of the art office space for shipping companies to operate.  It is planned to be ready by 2007!

Banks are interested in the shipping potential in the region.  National Bank of Fujairah and DVB Bank AG held an intriguing discussion about their different approaches to lending in the region.  Both have a great deal to offer, and the point was emphasized that there is every opportunity for local and international banks to link up and complement each other’s strengths, thereby giving optimal service to the region’s shipowners.

And our final session, entitled alternative finance, included a discussion by our anchor sponsor, Tufton Oceanic, about Islamic Finance, a new and huge potential source of finance to our industry, and a talk by CAT Finance baiting the audience with talk about building ships in the region and getting suitable finance.

The entire event was truly a great success emphasizing the opportunities that exist in the amazing locale of Dubai. You have to visit it to realise the enormous development and potential here.  And shipping and shipping finance is part of that development.   Marine Money will be back next year for the Second Marine Money Gulf Ship Finance Conference.  Try to come.   It is a great place to do business….and more!!