Shipping Industry Focus: Navigating Through a Sea of Changes

Stay informed via our mailing list

subscribe

Introduction

  • In recent years, the global shipping industry has been subject to a number of economic events that had an unprecedented impact on supply and demand within the market. The dynamic nature of the industry has and continues to present a unique set of challenges and opportunities for stakeholders to navigate, amid the uncertainty.
  • The shipping industry, vital for global commerce, is navigating through a wave of environmental regulations aimed at reducing its carbon footprint and promoting sustainability. The introduction of regulations such as the IMO 2020 sulfur cap and the EU’s “Fit for 55” regime precipitate a new array of challenges for vessel compliance, but also declare a significant step towards cleaner marine operations.
  • The shipping industry is now facing further regulations from the European Union, designed to accelerate the transition to a low-carbon future, and the Basel III/IV reforms have introduced a new exposure class specific to shipping that will result in higher capital requirements for shipping loans.
  • Beginning in the aftermath of the global financial crisis of 2007-2009, and following heavy losses incurred by traditional bank lenders, the shipping finance market has evolved substantially – with declining engagement from commercial banks giving rise to a growth of alternative investments. Valuation methods and minimum value covenants within deal documentation continue to be pertinent points of discussion due to the highly volatile nature of ship prices.
  • As institutional investors seek refuge from a rising cost of capital and look to amplify returns in a high interest rate environment, the largely unrated ship finance market has gained global attention.

Documents

Shipping Industry Focus: Navigating Through a Sea of Changes

20 Mar 2024

Contacts

Analytical

Business development

Latest ratings