Pareto Bank: Financing of maritime and offshore transport at Pareto Bank
Norway has a long and proud maritime history and has been an important part of the international shipping industry for over 150 years. The maritime transport and offshore segments constitute a viable and growing maritime cluster contributing to the creation of industrial value both in Norway and abroad and the Norwegian maritime cluster is an important player from a global perspective. Pareto Bank aims to contribute to the development of this core Norwegian competence by offering our clients personalized financing solutions for maritime transport and offshore investments.
We make loans – it’s that easy
Shipping is a capital intensive industry, and a good financing structure is an important factor in maintaining competitiveness in a sector with few barriers to entry, cost awareness and where revenues can be highly volatile. . Since the financial crisis, the capital landscape for the shipping industry has undergone major changes.
Many traditional maritime banks suffered heavy losses and left the industry. There has also been a growing trend among large maritime banks to focus more on selling additional, low capital intensive services from the banks’ product line.
The trend has become more pronounced due to the increase in capital requirements for traditional vessel financing implemented by regulators over the past decade. This increased focus on “cross-selling” has led the large maritime banks to favor large-cap clients who tend to use a larger portion of the bank’s product portfolio (i.e. ECM products and DCM).
This change in the orientation of the banks has led a large number of shipping companies and marine investors to face difficulties in obtaining financing. The lack of interest in the SME market and the financing of maritime transport projects from large donors has opened the doors to smaller niche banks like Pareto Bank.
At Pareto Bank we have extensive experience in ship finance and provide both individual project finance as well as finance directly to shipping companies. We thus have the necessary expertise to advise our clients and we are committed to finding solutions and opportunities with our clients.
Flexibility and tailor-made structures are often required to fund shipping projects and our dedicated team, with unique shipping and financing experience, can provide tailor-made financing solutions and assist new and existing customers. to realize new business opportunities in the maritime and offshore segments. .
STRATEGY AND FOCUS when financing maritime transport and offshore
The type of structures we offer can generally be divided into two main areas:
• Shipowners: direct financing to shipping companies
• Project financing: financing of maritime or offshore syndicated projects, partial financing of the acquisition of one or more vessels
The Pareto Bank is perhaps best known as a project finance bank; However, we also provide financing directly to fully integrated shipping companies.
Credit decisions are made on the basis of a thorough analysis of the segment, vessel type, market outlook, and the business and financial condition of the lender. Shipping is a global market, but Pareto Bank mainly focuses on clients based in Scandinavia. Pareto Bank wishes to contribute to the support of the Scandinavian maritime cluster through innovative financing solutions and we aim to be an advisor and an important partner for our clients.
Our goal is the financing of modern and liquid assets with first priority mortgages in ships as our main tangible guarantee. We aim for a conservative loan-to-value (LTV) ratio with an LTV between 50-60%, but it depends on the type of asset, contract coverage, additional security, etc.
For recourse facilities where the amount of the facility is partially or fully guaranteed by a reputable counterparty, higher LTVs may be considered, but always depending on the strength of the collateral provided. Our target ticket size is between USD 10 million and USD 20 million per funding with a duration of 3-5 years and we can offer both bilateral funding as well as club and union agreements in collaboration with others. banks.
With the client’s maritime transportation competence and track record, vessel condition and asset liquidity, entry point from a historical perspective, cash flow balance levels against Historical and expected future earnings as well as the market outlook for the relevant segment are all important elements that the bank will take into consideration.
For each financing, we perform a separate in-depth credit analysis in order to present a comprehensive risk assessment for the bank, but also to provide you as a client with a strong financing structure.
FAST AND EFFICIENT PROCESSES PROVIDE OPPORTUNITIES WHEN INVESTMENT IN SHIPPING AND OFFSHORE
We know that access to capital is a big competitive advantage in the shipping industry and when you apply for the financing of a vessel you are often in an investment process where time is of the essence.
Pareto Bank has short decision lines and can offer predictability that gives you a competitive advantage. We can quickly provide you with an indication of the terms and conditions of the financing we can offer you, both in terms of loan amount, LTV, pricing and repayment structure.
We are flexible, which gives us the possibility of financing projects which require tailor-made structures and we have extensive experience in both project financing and financing directly to shipowners.
As a provider of debt capital, we are a partner in the project. A financial partner who understands your needs with the desire to contribute in the best possible way to the success of your investments. We continually strive to be the preferred and trusted business partner providing the predictability and support you need to navigate through changing market conditions.
Source: Pareto Banque ASA