Faces & Places

We received word this week, that leading German law firm, Ehlermann Rindfleisch Gadow, has expanded its practice, opening a new office in London to be led by former Watson, Farley & Williams partner, Richard Henderson. With the addition of Mr. Henderson, the firm will be better able to advise its clients on all aspects of English law relating to commercial shipping, shipping finance and restructuring. While the intention is to grow the new office, Stefan Rindfleisch, the firm’s managing partner, has no intention of losing the boutique nature of the firm, which has served its clients so well.

Ship Finance Syndications Back?

The syndication market is showing signs of thawing, as evidenced by the number of shipping and offshore transactions in the market. In September 2010, a syndicate of international lenders made available a syndicated project loan facility of up to an aggregate of USD 110 million to a joint venture company incorporated in the Marshall Islands, to part finance various project and construction costs in relation to the heavy lift derrick pipe laying barge with 3,000-tonne crane. The syndicate comprised arranger ABN AMRO Bank, Singapore Branch, NIBC Bank in Singapore, Credit Industriel et Commercial, Singapore Branch and Northern Barge.

Built by ASL Marine shipyard in Singapore, the vessel was initially delivered to joint venture company Swiber PJW 3000, an SPC with three shareholders, Maas Capital, Siva Group and Singapore listed offshore services provider Swiber Holdings, each owning one third of the shares. The vessel was subsequently put on a 10 year bareboat charter with Swiber. Watson, Farley & Williams acted as lead and English counsel to the lenders. Continue Reading

Boxes Financed!

Orchid Container Finance, a company under major container box lessor Florens Container Corporation S.A., has secured a five year USD 198 million term loan at 185 bps above LIBOR for the sale and lease back of steel dry bulk containers and general purpose containers. The Singapore office of Watson, Farley & Williams were the advisers to the lenders ING Bank N.V., Singapore Branch and DBS Bank Ltd, Hong Kong Branch. Headquartered in Hong Kong, Florens Container Corporation is one of the world’s largest container box lessors.

Bank Financing of a 1985- Built Product Carrier

By Daniel C. Rodgers, Watson, Farley & Williams

For purposes of this exercise, let’s assume the following:

•    It is now 2002 and the ship is 17 years old.

•    The ship is currently owned by a special purpose corporation (the “SPC”) which is in turn 100% owned by a holding company (“HoldCo”) that also owns 19 other special purpose vessel owning entities, each of which owns a product tanker similar to the ship.

•    HoldCo seeks to refinance its entire fleet of 20 product tankers and is looking for an advance rate of between 60% and 80% of the fair market value of the fleet.

After approaching several well known banks in the shipping sector, HoldCo succeeds in obtaining a tentative commitment, subject to (among other things) completion of due diligence, from three banks (collectively, the “Lead Arrangers”) for the financing of up to 65% of the fair market value of the fleet, with interest at LIBOR plus a margin of 200 basis points (which HoldCo may hedge pursuant to an interest rate swap) and maturity in 2008.  HoldCo will be the borrower, and each of the SPC and the other vessel owning subsidiaries will act as guarantors of HoldCo’s obligations under the loan facility and in respect of any interest rate hedging instrument executed in connection with the loan facility by HoldCo.  The Lead Arrangers intend to syndicate the loan facility to other banks in the shipping sector.
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Credit Agricole Asia Participates in “Lets Together Shipping Fund”

Credit Agricole Asia Ship finance Limited, the agent for Credit Agricole Corporate and Investment Bank, as senior lender, and The Korea Development Bank, as junior lender, have provided USD 78 million pre and post delivery financing to two Panamanian single purpose companies established under the Korean “Lets Together Shipping Fund” structure for the acquisition of two 115,000 DWT bulk carriers.

The ships are being constructed at New Times Shipbuilding Co. Ltd. in the People’s Republic of China and, upon delivery, will be bareboat chartered to Hanjin Shipping Co., Ltd. One ship will be subsequently chartered under a consecutive voyage charter to Korea South-East Power Co., Ltd and the other ship will be subsequently chartered under a consecutive voyage charter to Korea Western Power Co., Ltd. Continue Reading

ABN AMRO Finances Another KDB vessel

ABN AMRO Bank, Singapore Branch has recently provided pre-delivery and post-delivery senior debt facilities to a Panamanian single purpose company established under the Korea Development Bank Shipping Fund Program for the acquisition of a capesize class dry bulk carrier.

The carrier was sold to it by STX Pan Ocean and will be bareboat chartered back to the company on delivery and, subsequently, sub-chartered out to a Hong Kong leasing company. The Singapore office of Watson, Farley & Williams advised ABN AMRO Bank the lenders in this transaction.

Chinese Money

China has many intrinsic reasons for supporting the shipyards – either by offering direct loans to the yards or to their clients. The labour intensive shipbuilding industry uses steel from Chinese steel mills, which is another important source of employment for many people. Since its establishment in 1994, China Exim Bank has played an instrumental role in supporting China’s maritime industry, having granted shipping/shipbuilding related loans of over RMB 116.8 billion (USD 17.1 billion) in the domestic currency and USD 8.5 billion in greenback at the end of 2009. The bank has supported the financing of 3,722 China built vessels of an aggregate tonnage of 120 million dwt and moving forward, China Exim Bank will continue to assist shipyards in stablising their orderbooks and secure new orders through the provisions of seller’s credit and buyer’s credit, payment guarantees and advance payment refund guarantees.

This year, the policy bank will be focusing its attention on providing financial support to promote mergers and acquisitions among the shipbuilders, encourage them to move into higher end ships such as LNG and offshore construction vessels and invest in new shipbuilding technologies. These initiatives are very much in line with the policy guidelines stipulated by the Chinese State Council last year. Continue Reading

London calling. London calling.

…. more education about shipping is key to attract investor appetite in London.

Marine Money returned to London after a long absence to host a wonderful 1st annual conference on 21st January 2010.  This was the first of 14 Marine Money conferences for 2010 and we got off to a cracking start.  Over 180 delegates and speakers attended with about one third coming from overseas.
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Bank of China in Action Again, What’s New

Bank of China has extended a USD 179.55 million buyer’s credit facility to STX Pan Ocean recently in relation to the South Korean shipper’s acquisition of three 17,600 DWT bulkers ordered at Jiangsu New Century Shipyard. Jiangsu New Century Shipyard is one of the largest private shipbuilding groups in China who has built over 100 ships for owners in Denmark, United Kingdom, Germany and Italy. This successful transaction was initiated by Bank of China’s branch in Jiangsu province, upon news of STX Pan Ocean’s difficulty in securing finance for the ships. This year, STX Pan Ocean has earmarked USD 203 million to invest in 6 vessels. Continue Reading

KDB Let’s Together Fund Finds Interest

Bank of Nova Scotia Asia and its syndicate of lenders have recently participated in Korea Development Bank’s shipping program. This is the first transaction effected under KDB Let’s Get Together Program, designed to enhance the liquidity of Korean shipping companies. Continue Reading