Via Global Trade Magazine; by Peter Buxbaum
Bank Provided Financing of $1.6 Billion. Standard Chartered, a global bank headquartered in London, has announced the completion of three shipping finance deals for clients in Asia and the Middle East.
These transactions highlight Standard Chartered’s continued commitment to the shipping industry and supporting Singapore’s position as a maritime hub amidst challenging conditions in the shipping and oil and gas markets. Many global banks have retreated from financing shipping companies and deals in recent years. They perceive the industry to be high risk as it is plagued with overcapacity and low freight rates.
In December 2016, Standard Chartered concluded a $684.5 million shipping finance facility for BW Gas JuJu LNG Limited (a joint venture partnership between BW Group and Marubeni).As facility coordinator, Standard Chartered led a syndicate of nine international banks in this transaction, which will refinance existing credit facilities for eight liquefied natural gas tankers on long-term charters to Nigeria LNG. The bank also acted as the lead arranger, agent, and security trustee, account bank, and hedging bank in this transaction which was the largest deal for BW Group in 2016 and a key milestone for them.
The bank also leveraged its strong expertise in shipping finance and Islamic financing to structure the $350 million senior secured Murabaha facility for the National Shipping Company of Saudi Arabia (Bahri) in November 2016. This facility will be used by Bahri to finance the construction and delivery of five Very Large Crude Carriers (VLCCs), which will be delivered in early 2018. As the exclusive carrier of Saudi Aramco’s crude oil sold on a delivered basis, Bahri will use these VLCCs to transport crude oil to the Americas, South Asia, and Far East. This was a landmark shipping transaction in the Middle East for 2016, where Standard Chartered led as bookrunner, mandated lead arranger, investment agent, and account bank with participation from three other banks.
The $572 million senior secured term loan facilities to subsidiaries of Reliance Group closed in October 2016 will finance six units of Very Large Ethane Gas Carriers. These gas carriers transport ethane gas from the US to India and support Reliance Group’s $1.7 billion Ethan Import Project to secure feed for its gas crackers, improve production cost position by diversifying feedstock and replacing oil linked feeds—propane and naphtha in existing crackers—and provide downstream capacity enhancement. Standard Chartered, given its strong shipping expertise, played a significant role of a trusted advisor to Reliance Group as commercial facility coordinator on the structure of its first shipping finance deal. This transaction included an innovative ship financing structure which was finally oversubscribed by 12 international banks.
“These deals, which are by no means easy structures, gave us the opportunities to work across teams in order to propose the most optimal and innovative financing solutions for each of the clients,” said Nigel Anton, managing director and head of shipping finance at Standard Chartered Bank. “We are very committed to continue supporting our clients as they expand and grow their businesses globally.”
