Fearnley Securities an Inflection Point for Alternative Financing? Marine Money, Tokyo. December, 2017

Transcription

1 Fearnley Securities 2018 an Inflection Point for Alternative Financing? Marine Money, Tokyo December,

2 Fearnley Securities Strong Presence Across Shipping Fearnley Securities has raised over USD 4 billion of capital across shipping and offshore sectors in the last 12 months Product offering Recent selected transactions USD 90m USD 40m Japanese lease financing 2 x MPP newbuildings USD 15m Japanese lease financing of dry bulk newbuildings USD 135m Japanese lease financing of crude /product tankers Strategic JV & Equity Investment Panamax VLGC fleet Co-Lead / Dry Bulk Selected Transactions USD 200m Secured Bond USD 100m USD 100m USD 125m USD 74m USD 88m Other Selected Transactions USD 100m Unsecured Bond Issue USD 125m USD 250m USD 650m Restructuring Secured bond USD 480m USD 800m 2

3 Banks and the Impact of Recent Shipping Crises Maritime sectors have been through a prolonged and severe downturn à significantly impacting bank lending policies Clarksea UDW 2.50 Shipping crisis hits Shipping crisis hits «Tandem low-cycle» Offshore low-cycle - Shipping low-cycle

4 Increased Banking Regulations Basel II coincided with a «tandem low-cycle» Values & rates (indexed) Secondhand index ClarkSea index Basel II Announcement Basel II

5 Regional Shift Western banks have been trying to reduce exposure while Asian lenders have become more active USDbn Europe USA USDbn Asia / Australasia Sources: Petrofin, Marine Money, Fearnley Securities 5

6 Opportune Time for Alternative Capital Minimal downside risk from historically low asset prices across most sectors Indexed historical asset prices 1.20 VLGC 2,800 TEU MR Panamax % - 80% down from peak

7 Opportune Time for Alternative Capital concurrent with a clear recovery in rates for certain sectors Rates and values at cyclical low levels VLGC 2,800 TEU MR Panamax Turning point for dry cargo and containers is behind us Sources: Petrofin, Marine Money, Fearnley Securities 7

8 Demand for Capital Among Western Owners Western ship owners Type I New, quality player Type II Established, looking to refinance Financing alternatives Alternative capital Equity Bank Bond Source of capital Full cash release at bottom of the cycle Non-dilutive Retain control and upside Selective market Mostly available to listed companies, limited private equity Dilutive if price < NAV Restrictive cash release Limited availability Low leverage Selective market Relatively high pricing Low leverage Status 8

9 2018 the Opportune Time to Provide Finance? Recovery In Underlying Markets Traditional Western Lenders Scaling Down First in dry cargo and containers, where rates have seen a sustainable increase over the last 6-18 months Many are still busy with very challenging restructuring and work-out situations and; Next we believe will be tankers, LNG and LPG, where a wave of newbuilding deliveries will soon finally have been absorbed The ones open for business are almost exclusively targeting existing and prioritized clients Abundant Capacity in Japan Substantial Demand for Financing Attractive funding cost for Japanese local owners Limited domestic owner / operator business From novel entrants who have built their business at rock-bottom asset prices and with a very lowly levered capital structure Players seeking alternative finance: 1. Established players seeking re-finance 2. New, quality owners with growth ambitions Conclusion There is a historic opportunity for alternative capital to transact on very attractive risk / reward ratios 9

10 Disclaimer This document is strictly confidential and has been prepared by Fearnley Securities for the sole use of the recipient in order to provide a basis for discussion. The information contained hereinafter is based on confidential and publicly available information. No independent verification has been performed and the content is disclosed for informational purposes only. No representation or warranty of any kind is made by Fearnley Securities regarding the accuracy and completeness of the information contained herein. By accepting this presentation, the recipient agrees that no liability of any form relating to the information contained in this document shall be assumed by Fearnley Securities. This document may not be released without prior approval of Fearnley Securities. 10

11