After the boom years in shipping driven by Asian demand and a shortage of suitable vessels the industry is experiencing troubled times due to a lack of demand and oversupply of ships. Falling freight rates have weakened many shipping companies and the global economic problems have caused bank lending sources, hitherto the mainstay of the industry, to dry up.

This course will answer these key questions:

• How will the industry overcome the lack of bank lending?
• Do falling asset values represent an opportunity?
• How do you survive in today’s climate and be ready for the upturn?

Key Features:

• Financing sources and products 
• Investing in ships
• Public and private equity
• Terms sheets and documentation overview
• Credit risk assessment and credit rating
• Risk management 
• Warning signs and restructuring shipping loans

This is an intermediate level ship finance training delivered in an intensive and interactive style with practical case study workshops.

The course takes into account the major challenges facing the industry today from both a financier and ship owners point of view.

This course has been designed for:

• Ship owning executives
• Bank lending officers
• Recovery managers of problem loans
• Venture capitalists and equity investors

1. Current ship finance overview

• Recent history
  - From boom to bust?
• Current conditions
  - Who is lending and who is not?
• Challenges facing the industry
  - Oversupply of ships
  - Falling demand
  - Lack of finance
  - How bad is it ?

2. Credit assessment

• The current financing market
  - Are the bank’s running out of patience?
  - Who is likely to get bank funding?
  - What do you have to do to get funding?
• Types of ship and valuations
• Risk analysis and rating models uncovered
• Cash flow modelling
• Security and mitigating risks

3. Risk management

• Lessons learnt (and then forgotten) from the last major recession
• Types of borrower
• Industry and borrower characteristics
• Outline terms- the negotiating document
• Key features of a loan agreement
  - Boiler plate and cost of funds clauses
  - Typical Covenants used
  - Events of default
• Practical case study:
  You are deputy head of shipping and you have received a borrowing request from a first class customer but bank funds are in short supply. How do you rate the transaction using a rating model, structure, price and secure the funds from your bank for your client?

4. Alternative finance

• In depth details
  - Types and sources of finance products
  - Export Credits and Structured Finance
  - Public and private capital markets
• Debt finance
• Mezzanine
• Sale and leaseback
• High yield bonds
• Public equity
• Private equity
• IPO, Master limited partnership
• Other capital market products
• Leasing and Islamic finance
• Practical case study:
  You are a Greek shipowner with a medium sized fleet with a good reputation in the industry. You need to raise funds and as bank debt is in short supply you need to consider alternative finance markets. Which alternative markets could you focus on and why?

5. Investing in ships

• Key drivers
• Risk and return
• Data analysis
• Financial modelling
• Practical case study:
  You are an investment executive working for a private equity concern who have not invested in ships before. You have recently looked at the shipping markets and believe there is great potential upside. Compile a comprehensive investment proposal for your board.

6. Restructuring-what happens if it goes wrong?

• Warning signs
• Restructuring
• Management of problem loans
• Practical Case Study (negotiation)
  The delegates will be divided into 2 groups.
  
  You are a bank officer or the shipowner.
  - A medium sized customer of yours has breached covenants in his loan agreement. Is he on the point of default?
  - You will need to review the current trading position and decide on the options available to the bank.
  - You will then draw up an action plan for the option that you believe is suitable from the Bank’s perspective.
  - If you are the shipowner then you will need to have your own strategy developed and to react (maybe resist) the bank’s chosen option.
  

• Peter Stowell

   Peter has over 25 years experience in Corporate and Asset Finance. For most of the last 20 years he has specialised in shipping finance. Peter was appointed Deputy Head of Ship Finance for Barclays Bank PLC in 1986 where he led a team whose main focus was Scandinavian shipping companies. Following this he was promoted to Corporate Finance Director and Head of Barclays Acquisition Finance dealing with highly leveraged transactions. 
  
  In 1994 Peter was invited to join KBC Finance Ireland. He was recruited to start up and develop a ship finance unit. By 2000 the business was ranked 14th Global provider of ship finance (source: Capital Data). After four years Peter was also appointed to the Board of KBC Finance Ireland a subsidiary of KBC Bank N.V. specialising in Project, Aerospace and Shipping finance.
  
  In 2002 Peter left KBC to form PS Consulting a management consultancy business with a particular focus on shipping finance. Assignments undertaken include advice for the Irish Maritime Development Agency in respect of the Marketing and development of a maritime cluster, project appraisal, debt arrangement and personnel training for financial institutions.
  
  Subsequently Peter became Head of Shipping with Lloyds TSB plc, where he was responsible for repositioning of the existing ship finance business and creation of a strategy for growth. At the end of October 2005 Peter left Lloyds TSB and returned to PS Consulting. Peter is a Fellow of the Chartered Institute of Bankers (Institute of Financial Services) and a member of the Baltic Exchange.

Ship Finance

Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.

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