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Thursday, 27 February 14
SHIPPING LOANS WORTH $5 BILLION HAVE CHANGED HANDS OVER THE PAST YEAR, AS FUNDS INVEST IN SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Funds investing in shipping has been the "talk of the town" over the past couple of years, as institutional investors, private equity and hedge funds have all emerged as newcomers to the shipping financing segment, often assuming the role of traditional shipping banks, which have exited the market, or cut their exposure. According to the latest weekly report from shipbroker Intermodal, the vast majority of those funds have been consumed in buying up shipping loans. "About $5 billion in shipping loans have changed hands in the past year and demand is driving loan prices to levels almost in line with book values", said the shipbroker.
According to an analysis by Intermodal's SnP broker George Dermatis, these funds "do not hesitate taking over entire fleets and even align themselves with several managers in an insatiable escapade to take over debts and even ships/assets on their balance sheets. Funds tolerate systemic risk much more than traditional banks that are massively exiting or reducing their exposure in the sector. So one could argue that one player is filling up the void the other creates. Therein lays the paradox" he noted.
Dermatis said that "the characteristics of traditional banks are undoubtedly much more to the liking of traditional shipowners; no exit strategy other than full debt repayment, name lending based on interpersonal relationships, which in some cases dates back decades, experience over several shipping cycles and the list goes on. The industry perceives this as an overall alignment of interests. Private Equity funds stand more or less at the other side of the road on all of these points and that creates nervousness to most being afraid of how fast these investors can climb the learning curve or lose their interest in the process".
According to the broker, "the truth is that shipping largely remains in the hands of its professionals, who live and breathe the essence of this sector and who -to a large extent- have assigned a negative connotation to the publicity that funds along with capital markets and OTC offerings gather. So, despite the fact that financing from these sources has in many times arrived when no other source of funding was available, the truth is that our industry still views them with skepticism. My personal feeling is that people spend too much time “loving or hating” a way of financing whose significance has been grossly overestimated - at least for the time being", Dermatis mentioned.
He went on to add that "despite the fact that numbers -especially last year's- are indeed impressive, it seems that equity funds do not contribute more than $6-7bn on average per year, which seems like a drop in the ocean when compared to conventional debt financing by banks which continues to provide around $250bn annually according to Marine Money. During the peak times of 2008, these figures stood close to $500bn (!!!) and this should therefore be sufficient to hush down fears that private equity alone could lead to a bubble or that it could even distort market reality... The main worry linked to overcapacity remains and the finance gap on newbuilding orders persists if not broadens. The latest available data speaks of figures of over $125bn... Whilst the presence of “new” money is duly noted, we all need to realize that the industry must be able to carry its own weight. If that means changing our processes, transparency levels, corporate responsibility standards, etc. in order to bridge this gap and attract a greater share of their attention, then maybe this is a change we should embrace", Dermatis concluded.
Meanwhile, in the dry bulk market this past week, things continued to improve on the back of rates for the smaller size segments holding on to their levels and those for Capes correcting upwards, said Intermodal, while the spill-overs of the improved sentiment have yet to affect the Panamax market. Nevertheless, the BDI ended yesterday on yet another higher note, ending the session at 1,222 points.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Friday, 21 March 14
MERCURIA ANNOUNCES ACQUISITION OF J.P. MORGAN PHYSICAL COMMODITIES BUSINESS
COALspot.com: Mercuria Energy Group announced that it has reached a definitive agreement with J.P. Morgan Chase & Co. to acquire its physica ...
Thursday, 20 March 14
CAPESIZE: WEST AUSTRALIA TO CHINA RATES HAVE CLIMBED BACK TOWARD USD 11 PMT - FEARNRESEARCH
Handy
From a slight improvement in the Atlantic to a more mixed picture this mid week. North Atlantic rounds showing softening signs whereas S ...
Wednesday, 19 March 14
INSTEAD OF DECIDING WHETHER THE GLASS IS HALF FULL OR HALF EMPTY, I AM CURRENTLY GLAD THERE IS WATER IN THE GLASS - EVA TZIMA
By Eva Tzima
Research Analyst
Intermodal Research & Valuations
Right when you think that you have all your facts straight, right wh ...
Wednesday, 19 March 14
EUROCOKE SUMMIT 2014
Press Release: ThyssenKrupp, Steel Institute VDEh, SSI and more headline Smithers Apex’s Eurocoke Summit
The leading coke, coal and s ...
Wednesday, 19 March 14
DRY BULK MARKET REBOUND LEADS TO MORE NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The steady rise of the dry bulk market, as evidenced by the return, yesterday, of the Baltic Dry Index above the 1,500-point mark (1,518), is fu ...
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- CIMB Investment Bank - Malaysia
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- Samtan Co., Ltd - South Korea
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- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- White Energy Company Limited
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
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- Indonesian Coal Mining Association
- PTC India Limited - India
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- Siam City Cement PLC, Thailand
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- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
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- Bhushan Steel Limited - India
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- Planning Commission, India
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- Karbindo Abesyapradhi - Indoneisa
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- Goldman Sachs - Singapore
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- SMC Global Power, Philippines
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- Wood Mackenzie - Singapore
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- Standard Chartered Bank - UAE
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- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
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- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
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- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
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- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
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- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
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- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Wilmar Investment Holdings
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- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- The University of Queensland
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
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- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
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- Deloitte Consulting - India
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
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- Kohat Cement Company Ltd. - Pakistan
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- Sarangani Energy Corporation, Philippines
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- ICICI Bank Limited - India
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- CNBM International Corporation - China
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- Global Business Power Corporation, Philippines
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