Menu
Marine Money panellists see buoyant 2021 for ship finance

Insights / / Marine Money panellists see buoyant 2021 for ship finance

Stuart McAlpine, Global Head of Marine Projects at Ince, chaired an engaging discussion on trends, products and pricing in shipping finance at this year’s London Virtual Marine Money Forum. An esteemed panel of guests consisting of Torm’s Kim Balle, Gaurav Moolwaney of Standard Chartered Bank, Thor Erling Kylstad of Smarine Advisors, Citi’s Shreyas Chipalkatty and Ian Webber of Global Ship Lease contributed a broad range of perspectives and shared a sanguine outlook regarding the prospects for shipping finance in 2021.

The panellists first reflected on a 2020 of two halves. With the initial shock of the coronavirus pandemic, it initially took a while for the industry to take stock of the likely duration and effect of the pandemic on financing. Overall, however, Gaurav Moolwaney concluded that the year was not as bad as many had thought it would be in Q1 2020, noting in particular, that the tanker and container sectors had fared relatively well. Considering the list of challenges Kim Balle set out, including the introduction of IMO 2020, the fall in oil prices and volatility in freight rates and stock levels, it is clear that the shipping industry showed a lot of resilience. Indeed, Ian Webber commented on the ’significant recovery’ in the second half of 2020, which allowed a transition from severely limited sources of finance to a much friendlier financing environment. Besides the main headline of a sharp recovery, the panellists also noted some interesting subplots like the growth of hydrogen fuels and ESG-financing products, as well as the continued ascent of Chinese leasing.

The panellists also had positive expectations for 2021, with Shreyas Chipalkatty perhaps providing the main takeaway that ‘there is a lot of firepower in the banking community to fund the right deal’. Shreyas expected deals valued at around $150m-$200m to be of particular interest to banks. Gaurav Moolwaney echoed this, noting that bank lending remained the cheapest form of capital, but Kim Balle highlighted the importance of diversification of financing options.

Following the trend of recent years, Thor Erling Kylstad expected Chinese-leasing-house activity in the industry to continue to grow, notwithstanding that volumes might suffer potential blowback from 2020 that may take some time to filter through. Leasing houses are expected to remain an attractive option, but could become more selective in terms of the businesses they serve, with a preference expected for standard, modern vessels that provide more liquidity. Notwithstanding this, Thor Erling expected the larger leasing houses to have an appetite for deals running into several hundreds of millions of Dollars.

Debt and equity capital markets are also set to feature in the financing mix. Gaurav Moolwaney noted that there is an appetite among banks to grow their shipping portfolios, with new sectors, such as offshore wind farms, set to be of increasing interest.

Overall, the panellists’ comments suggested that financing will be available in 2021 from a variety of sources, both traditional and non-traditional, with the ESG lending landscape set to evolve particularly quickly. As the global Covid-19 vaccine rollout continues and market conditions for a strong rebound strengthen, it seems that now is a good time for owners to engage with financiers and to consider their strategy for the post-Covid-19 shipping landscape, ready for full steam ahead once markets rebound.

This article was co-authored by Trainee Solicitor at Ince, Lewis Habbershaw.

In this short podcast, Global Head of Marine Projects at Ince and panel moderator, Stuart McAlpine, is joined by Managing Director of Smarine Advisors Norway AS and panel speaker, Thor Erling Kylstad, to reflect on the panel discussion and discuss some of their key takeaways and thoughts:

Stuart McAlpine

Stuart McAlpine Global Head of Marine Projects

Related sectors:

Related news & insights

News / Shipping E-brief May 2022

16-05-2022 / Maritime

The Shipping E-Brief is a publication providing you with key information on legal decisions and developments in shipping and related business areas.

Shipping E-brief May 2022

News / Court dismisses appeal from arbitration award that challenged findings of fact

09-05-2022 / Maritime

Laysun Service Co Limited v. Del Monte International GMBH [2022] EWHC 699 (Comm) This was a dispute under a contract of affreightment, in which the arbitral tribunal made an award in the Charterers’ favour. The Owners subsequently appealed, alleging that the tribunal had erred in its findings on issues of law. The Court, however, dismissed the challenge, concluding that the Owners were in fact seeking to impugn the arbitrators’ findings of fact, which were not open for appeal.

Court dismisses appeal from arbitration award that challenged findings of fact

News / The IPCC Report and its impact on shipping

09-05-2022 / Maritime

In April 2022, the Intergovernmental Panel on Climate Change (IPCC) published the Working Group III report on “Mitigation of Climate Change”, the third instalment of the IPCC’s Sixth Assessment Report. This follows the Working Group I report on “The Physical Science Basis” and the Working Group II report on “Impacts, Adaptation and Vulnerability”.

The IPCC Report and its impact on shipping

News / Electronic trade documents: the Law Commission’s recommended reforms

09-05-2022 / Maritime

The Law Commission of England and Wales has now published its final report on electronic trade documents, together with draft legislation for intended presentation to Parliament by May 2022.

Electronic trade documents: the Law Commission’s recommended reforms

News / Court dismisses financing bank’s misdelivery claim for lack of title to sue

04-05-2022 / Maritime

Unicredit Bank AG v. Euronav NV (Sienna) [2022] EWHC 957 (Comm) This was a claim brought by a bank that financed the purchase of a cargo and subsequently sought to recover damages for misdelivery following discharge of the cargo without production of the original bill of lading. The claim failed because, in the circumstances of this case, the bill of lading that had been endorsed to the Bank did not contain or evidence the contract of carriage in respect of the cargo.

Court dismisses financing bank’s misdelivery claim for lack of title to sue

Insights / Court corrects obvious accounting mistake in arbitration award

27-04-2022 / Maritime

In a charterparty dispute, the Court has set aside part of an arbitration award on the grounds that the arbitrator reached a conclusion that was contrary to the common position of the parties, and for which neither party contended, without providing an opportunity for the parties to address him on the issue. In the circumstances, this represented a failure to conduct the proceedings fairly. The decision provides useful guidance on how to proceed where a tribunal makes an obvious mistake in its award but declines to remedy it.

Court corrects obvious accounting mistake in arbitration award