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Latest major developments in shipping finance

Year 2007, Volume: 13 Issue: 2, 181 - 189, 01.08.2007

Abstract

Abstract The ship finance is no more a fixed science than is any other sort of finance. Financial terms, conditions, banks and shipowners become ever more sophisticated. Because shipping is a highly capital intensive industry, with its 32,000 world- wide companies is one of the three most finance intensive industries in the world, about 80 billion dollars per year for financing new buildings alone. The financing of large ocean-going ships are undertaken by banks all over the world, by no means just for owners in their own country. This is so as banks are willing to finance, during boom periods, shipping loans for new buildings but by this way ‘create’ oversupply and thus depress the freight market by their own actions. Therefore, ship values can change by up to 65 percent in a few months. A five year old Panamax bulk carrier, for example, could be purchased for US$ 13.5m and achieve freight rates of US$ 5,500 per day in 1999 while a similar profile vessel was worth US$ 46m and achieved freight rates in excess of US$ 46.000 per day in 2005. For this reason, the shipowner can make, or lose millions of dollars and so can his bankers if things go badly wrong. For these reasons, the principle subject of this study is to examine a significant increase in alternative capital sources in recent years. Debt and equity from the public markets, German KG systems and Islamic finance, can all now be regarded as commonplace in the shipping finance market.

Year 2007, Volume: 13 Issue: 2, 181 - 189, 01.08.2007

Abstract

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Details

Primary Language English
Journal Section Articles
Authors

E. Cihan Akca This is me

Publication Date August 1, 2007
Published in Issue Year 2007 Volume: 13 Issue: 2

Cite

APA Akca, E. C. . (2007). Latest major developments in shipping finance. Journal of Black Sea / Mediterranean Environment, 13(2), 181-189.
AMA Akca EC. Latest major developments in shipping finance. Journal of Black Sea / Mediterranean Environment. August 2007;13(2):181-189.
Chicago Akca, E. Cihan. “Latest Major Developments in Shipping Finance”. Journal of Black Sea / Mediterranean Environment 13, no. 2 (August 2007): 181-89.
EndNote Akca EC (August 1, 2007) Latest major developments in shipping finance. Journal of Black Sea / Mediterranean Environment 13 2 181–189.
IEEE E. C. . Akca, “Latest major developments in shipping finance”, Journal of Black Sea / Mediterranean Environment, vol. 13, no. 2, pp. 181–189, 2007.
ISNAD Akca, E. Cihan. “Latest Major Developments in Shipping Finance”. Journal of Black Sea / Mediterranean Environment 13/2 (August 2007), 181-189.
JAMA Akca EC. Latest major developments in shipping finance. Journal of Black Sea / Mediterranean Environment. 2007;13:181–189.
MLA Akca, E. Cihan. “Latest Major Developments in Shipping Finance”. Journal of Black Sea / Mediterranean Environment, vol. 13, no. 2, 2007, pp. 181-9.
Vancouver Akca EC. Latest major developments in shipping finance. Journal of Black Sea / Mediterranean Environment. 2007;13(2):181-9.