Free money for shipping has ended, but banks remain enchanted

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Hamburg-based ship finance platform oceanis predicts a strong six months in its Q2 State of Ship Finance report.

Shipping finance markets for the rest of 2023 look positive, with a depth of lenders, banks, leasing houses and alternative credit funds all seeking to grow their portfolios and offer the best terms to win projects, it says.

Competition between lenders in the improving Tanker markets is especially fierce. While financing volumes available for each individual vessel have plateaued as asset values rose over the past quarter, margins have been under severe downward pressure as banks have started to explore financing cases further from their previous comfort zones.

Meanwhile, opportunities remain in the less liquid Dry Bulk and Container markets.

Erlend Sommerfelt Hauge (pictured), Managing Partner at oceanis, says: “Base interest rates, while currently high, are projected to fall from the second half of 2023. While the ‘free money’ era has ended for now, financing costs can be expected to decrease in the near to medium term as central banks react to the decreasing inflation we are seeing today as well as being spooked by the financial turbulence triggered by higher base rates.”

He adds: “Between these factors, improved earnings compared to the past decade across all sectors and margins being compressed by financiers looking to defend their loan books or even grow, now remains a great time to finance your fleet.”

To read the full report, which includes updates on the Dry Bulk, Tanker, Containership, Offshore, LPG and LNG sectors, go to: https://api-prod.oceanis.io/reports/pdf/Oceanis-Q2-Market-Report.pdf

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