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Financing / investing the offshore and maritime energy transportation Ioannis Alexopoulos, Director.: London.: Athens.: Singapore Eurofin Eurofin S.A.

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Presentation on theme: "Financing / investing the offshore and maritime energy transportation Ioannis Alexopoulos, Director.: London.: Athens.: Singapore Eurofin Eurofin S.A."— Presentation transcript:

1 Financing / investing the offshore and maritime energy transportation Ioannis Alexopoulos, Director.: London.: Athens.: Singapore Eurofin Eurofin S.A. Seafin Presentation to

2 2 Oldest, largest, specialized ship-financing investment boutique with global coverage 30 Years Committed in Ship-Finance US$15 Billion Ship-Financing Deals (globally) FlexibilityTailor made structures Commitment Team dedicated to ship-financing Strong RelationshipsShip-financing Providers / Owners RecognitionRepresenting KfW IPEX-Bank Global CoverageOffices in major shipping centers London Athens Singapore Eurofin Group (Overview)

3 3 Asset Values (US$ mm - as at June 2013) July 2008 June Year old Capesize 5-Yr 3,500 Teu vessel 5-Year old Aframax Dry Container Tanker ~(79%) 5-year Peak: $150m % Change to Current: ~(79%) ~(72%) 5-year Peak: $65m % Change to Current: ~(72%) ~(66%) 5-year Peak: $79m % Change to Current: ~(66%) (80%) (74%) (69%) % Change Shipping Charter Rates (Indexed - as at Q ) Source: Clarksons Research, Baltic Exchange Shipping environment Freight Rates & Asset values have plummeted In all three main shipping sectors

4 A totally different picture Increased demand for specialized offshore / energy maritime assets Coupled with a tight supply of available tonnage Offshore & Energy Maritime Environment 4 LNG – Freight RatesLNG – Newbuilding Prices Source: RS Platou

5 The (Traditional – Plain Vanilla) Senior DEBT Ship-Financing Environment 5

6 Any guesses? 6 Ship financing environment: EUROPE © Chappatte -

7 INCREASE from 2008 DECREASE from 2008 Source: Marine Money, May Largest Global Shipping Banks Portfolios in Dec 2012: US $347.6 billion (from US $358 billion in 2008) Reduction in Global Shipping Banks Capacity Senior Debt – GLOBAL Ship-Financing environment 7

8 Are Shipping Banks still there? Senior Debt – Global Ship-Financing environment Greek Banks : CLOSED UK Banks: LIMITED Capacity (if any) FRENCH Banks: LIMITED Capacity (if any) GERMAN Banks: SOME Capacity for new deals Scandinavian / Swiss Banks / US / Australian: (SELECTIVE ) All Re-organizing Balance Sheets / Re-building regulatory capital (BASEL III ) 8

9 A (totally) different picture Senior Debt – Offshore & Energy Maritime CAPACITY IS THERE SYNDICATION & CLUB DEALS STRUCTURES ARE AVAILABLE WIDE RANGE OF DIFFERENT BANKS: (German / US / Swiss / Norwegian / Swedish / Australian) BENCHMARK ON PRICING AND LEVERAGE (GASLOG) 9

10 CHINESE BANKS CAPACITY IS NOT AN ISSUE POLICY BANKS China Exim Bank China Development Bank ALTERNATIVE Ship-Financing Sources Filling the gap 10

11 Are they really there? Chinese Banks Issues for (NON policy) Chinese Shipping Banks (a) Credit Tightening (to control possible inflation pressures) (b) HIGH US $ Funding Cost (Scarce Availability) Requirements (A) Strong Chinese Element: (China Newbuilding / Time Charter to Chinese SOE) Chinese Newbuilding Requirement is not being met. 11 Not particularly relevant at present for the Offshore & Energy Maritime

12 Export Credit Agency (ECA) Ship-Financing Structures ALTERNATIVE Ship-Financing Sources Filling the gap 12

13 Competition at a political level Export Credit Agency (ECA) Structures GOVERNMENT AGENCIES ASSISTING EXPORT FINANCE JAPAN NEXI: Nippon Export and Investment Insurance JBIC: Japan Bank for International Cooperation KOREA K-sure: Korea Trade Insurance Corp. Korea Exim Bank NORWAY GIEK: Insurance Agency Eksportfinans GERMANY Euler Hermes KfW IPEX-Bank 13

14 KfW IPEX-Bank finances Royal Caribbean German ship financier KfW Ipex led the export credit financing $997 million for USA shipowner Royal Caribbean International. The vessel was ordered from Papenburg-based Meyer Werft. Competition at a political level Export Credit Agency (ECA) Structures 14 The loan is covered by a government export guarantee administered by credit insurer Euler Hermes.

15 THENAMARIS SECURED $400 MILLION LOAN FACILITY FOR ITS 3 LNG NB. Competition at a political level Export Credit Agency (ECA) Structures 15 A $200 million tranche was extended by KEXIM The remaining $200 million was equally shared between 3 banks; DnB NOR, ABN AMRO and ITF (part of DVB)

16 Public Equity Public Debt Private Equity ALTERNATIVE Ship-Financing Sources Filling the gap 16

17 Public equity helped (if you were public) Alternative ship financing: Public Equity Powerful for already listed shipping companies Mostly Follow On Offerings to reduce Debt Exposure Golar: Equity raised (for Expansion in the LNG, FSRU energy sector) of more than $0.5 Billion in 6 Months July 2012: 1 st Follow-On : $223 Million November 2012: 2 nd Follow-On : $181 Million February 2013: 3 rd Follow-On : $130 Million 17 OPEN - for Offshore & Energy Maritime

18 Alternative ship financing: Public Equity Golar LNG Partners LP (6-Month)

19 Attractive alternative to L/T amortising debt Alternative ship financing: Public Debt Accommodating for already listed companies Closed in the heights of the credit crisis, but opened up quickly from Q2 2009, faster than expected Non-investment grade bonds High yields / Convertibles Good opportunity to diversify Shipowners: Ability to meet near term liquidity needs and to improve near term cash flow Gaslog announced that it has priced an offering of NOK 500,000,000 aggregate principal amount of senior unsecured notes due OPEN - for Offshore & Energy Maritime

20 Post 2008 Private Equity Transactions in Shipping 20 Alternative ship financing: Private Equity Source: Tiger Analysis

21 Offshore & Energy Maritime Conclusions TOP ON THE AGENDA [of the Few Remaining Shipping Banks] DEBT: POSITIVE ELEMENTS [+ve Macros / Demand & Supply Balance / Modern Specialised Assets / Strong Corporates / Long Term Employment with Investment Grade Charterers / possible ECA cover] CAPITAL MARKETS: AN IMPORTANT ELEMENT High Capital Intensive sector; it is necessary to establish a well diversified Capital Structure (with different capital sources). 21

22 U.S. becoming a major LNG exporter Developments (to watch out for) 22 Global impacts of LNG exports from the United States

23 Detroit said on Friday it would stop making payments on some of its about $18.5 billion debt,....called on most of its creditors to accept pennies on the dollar The Global (Financial) state of Affairs Developments (to watch out for) 23 SEC commissioner Dan Gallagher – April 2013 REUTERS – June 2013 $3.7 trillion muni bond market 74% of that money came from retail investors.

24 Thank You Eurofin Group of Companies 24 Ioannis Alexopoulos, Director.: London.: Athens.: Singapore Eurofin Eurofin S.A. Seafin 11 Neofytou Douka Str., Athens, Greece - T: Website:


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