presented by Ted Petropoulos HEAD PETROFIN RESEARCH Global Capital Forum 4th February 2014 King George Palace Hotel Increasing commitment towards purchases and newbuilding orders by Greeks. How are these funded? presented by Ted Petropoulos HEAD PETROFIN RESEARCH

Presentation outline Shipfinance and acquisition trends – the Greek story and Globally 2. Sources of finance for vessel acquisition 3. The funding situation 4. Summary and Conclusions PETROFIN RESEARCH www.petrofin.gr

1. Ship finance and ship acquisition trends The Greek story In 2013, the Greek orders amounted to 275 (compared to 881 in 2012- Clarksons), up from 135 in 2012 (Sources: Moundreas and Naftiliaki). Greeks have ordered the most ships, about 25% of global orders, of a total value approx. $13bn (Source: Moundreas) In the S&P of second hand vessels, an overall of 1500 ships were bought, of which approx. 375 were bought by Greeks, followed by the Chinese with less than 125 (Sources: Naftiliaki, Allied Shipbrokers). Value for the Greek fleet (excluding rigs, offshore and cruises) estimated at US$101bn (Source: VesselsValue.com) PETROFIN RESEARCH www.petrofin.gr

1. Ship finance and ship acquisition trends The Greek story According to Petrofin Bank Research ©, lending into Greek shipping has been falling from $67.7bn end 2011 to $65.8bn end of 2012. We are in the process of completing Petrofin Bank Research as of end 2013. We anticipate a further drop in Greek shipfinance, in view of the condition of the remaining 5 Greek banks and of most of the other major lenders to Greek shipping adopting serious lending restrictions. PETROFIN RESEARCH www.petrofin.gr

1. Ship finance and ship acquisition trends Globally Norwegians may not have ordered the most ships, but have spent the most money on orders (approx. 17bn worth of newbuildings, in 2013 (Source: Clarksons) Global ship lending figures (drawn and committed) as of November 2013 are estimated at $460bn (Petrofin Research ©). The above includes the offshore support sector but excludes rigs and shipyard finance PETROFIN RESEARCH www.petrofin.gr

1. Ship finance and ship acquisition trends Globally The Global Fleet value, excluding rigs, offshore and cruises is estimated at US$660bn (Source: VesselsValue.com) Tufton Oceanic have estimated that the value of the global fleet INCLUDING offshore, rigs, and all orders, but not cruises, as of January 2014, stands at US$1.269tr. In Graph 1, we present the latest Petrofin Bank Research ©, on the shipping loan portfolio of the top 40 global ship finance banks representing $404.19bn of total loans (87.86% of the total). PETROFIN RESEARCH www.petrofin.gr

Bank Lending to Shipping PETROFIN RESEARCH www.petrofin.gr Ship finance based on interim data up to beginning December 2013 – in $bn Top 40 banks as of beginning December 2013: $404bn November 2012 - Top 40 ship finance banks’ portfolios stand at approximately at $422.135bn * Market estimate

Top 40 Bank Lending to Shipping Graph 2 Top 40 Bank Lending to Shipping PETROFIN RESEARCH www.petrofin.gr Ship finance based on data up to beginning December 2013 – in $bn Source: Petrofin Bank Research December 2013

1. Ship finance and ship acquisition trends Globally Last year, the top 6 banks’ share was approx. 34.17% (with a combined portfolio of $144.25bn). This year the top 6 banks’ share is 30.45% (with a combined portfolio of $123.06bn) Lastly, European bank exposure accounted for 83.12% of the top 40 total in 2010 and 81.69% up to November 2011 and 75.13% in November 2012 and 71.84% at beginning December 2013. PETROFIN RESEARCH www.petrofin.gr

Source: Petrofin Bank Research December 2013 Top 40 banks in terms of geographical position, portfolios and percentage hold of the totals – from 2010 to beginning December 2013 Graph 3 PETROFIN RESEARCH www.petrofin.gr Source: Petrofin Bank Research December 2013

European banks – Comparison between 2010 and up to beginning December 2013 PETROFIN RESEARCH www.petrofin.gr Other UK and Ireland Scandinavia France and Belgium Holland Greece Germany

2. Sources of finance for vessel acquisition PETROFIN RESEARCH www.petrofin.gr 2. Sources of finance for vessel acquisition Second hand purchases Bank finance (Western banks): declining/highly depending on owner (The top 6 banks last year held a portfolio of $144.25bn, in May 2013 this stood at $135.5bn, whereas in December 2013 their collective portfolio was down to $123bn) Bank finance (Far Eastern banks): negligible Public markets: rising (Navios Maritime Acquisition acquired 2 bulkers at $160m, Star bulk spent $60m for 2 post-panamax, DHT buys two second-hand VLCCs for $99m and many others)

Second hand purchases continued 2. Sources of finance for vessel acquisition Second hand purchases continued Export credit agencies: negligible Own capital resources: rapidly increasing International Private Capital (Equity funds): rapidly increasing/depending on owner (Euronav's $1bn takeover of the the 15-strong VLCC fleet of Maersk Tankers. Equity from BHRCapital, Glendon Capital Management and Solus Alternative Asset Management, GoldenTree Asset Management, York Capital Management, BlueMountain Capital and Avenue Capital Group.) (Source: Tradewinds, Naftiliaki) Private capital: rapidly increasing/depending on owner PETROFIN RESEARCH www.petrofin.gr

Newbuilding acquisitions 2. Sources of finance for vessel acquisition Newbuilding acquisitions Bank finance (Western banks): low/ highly depending on owner Bank finance (Far Eastern banks): increasing/ highly depending on owner (Costamare) Public markets: rising (Scorpio, Star Bulk, Blue Wall Shipping, New Lead etc.) Export credit agencies: increasing (ECGD, Coface, Hermes, GIEK, CEXIM – their export credit agency, Atradius) PETROFIN RESEARCH www.petrofin.gr

Newbuilding acquisitions continued 2. Sources of finance for vessel acquisition Newbuilding acquisitions continued Own capital resources: increasing International Private Capital (Equity funds): rapidly increasing/depending on owner (Jeff Pribor (Jefferies’ head of investment) says owners should not fear a shipping recovery being wrecked by the run of money from the capital markets and private equity. Pribor asserted that the $8bn raised by listed shipping companies in 2013 and the potential $12bn private equity presence in the industry lack the scale to be a problem. Euroseas Private capital (independent investors): rapidly increasing % of newbuilding finance covered: less than 25% PETROFIN RESEARCH www.petrofin.gr

2014 - World Fleet & Orderbook Value USD 1.269 trillion 3. The funding situation Sources – January 2012 Sources – January 2014 2012 - World Fleet & Orderbook Value USD 1.112 trillion 2014 - World Fleet & Orderbook Value USD 1.269 trillion Source: Tufton Oceanic data

Source: Tufton Oceanic data 3. The funding situation Uses – January 2012 Uses – January 2014 Source: Tufton Oceanic data

4. Summary and conclusions Greeks remain totally committed to shipping, as the prognosis for shipping and especially dry and wet are very positive Interest in acquiring more vessels is accelerating. Every financial and private capital source is being exploited Increasingly more reliance on own resources Newbuilding order book remains largely speculative PETROFIN RESEARCH www.petrofin.gr

Thank you PETROFIN RESEARCH © www.petrofin.gr February 2014