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Chinese leasing firms seen as complementary

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After suddenly bursting on the scene with dramatic impact in the past five or six  years, Chinese ship leasing companies have reached a stage of maturity and are adding to the overall ship finance market.

A panel at the Marine Money Hong Kong Ship Finance Forum agreed that these companies are neither detrimental nor pose a threat to traditional shipping finance or the shipping industry as a whole.

“We are just a channel between the customers and the shipyards,” said ICBC Leasing Shipping Finance manager Tang Wenwen. “Nowadays we structure our leasing products and introduce foreign clients to Chinese shipyards, in this way building a channel and providing opportunities for these yards,” she said, adding that the final decision still lies with the client and there is no pressure from other bodies.

“We see that the Chinese leasing houses have distinct strategies on what they focus on, they’re not all necessarily chasing the same deals,” said DNB Markets md and regional head of Asia Investment Banking Joachim Skorge.

“We also see they are quite well-disciplined in terms of what they can or cannot do. It’s a well-functioning and not an overcrowded market,” he emphasised.

In fact, Skorge pointed out, as DNB has changed its role from a traditional Western shipping bank to offering a wider investment banking based suite of services, it has found it beneficial to work with some of these companies for mutual benefit, providing refinancing while making more efficient use of capital as the pool of available credit is broadened.

“Working with Chinese leasing houses is more a complement to our existing business model than competition,” said Skorge.

CMB Financial Leasing director of Shipping Finance Anna Mao added that they are now also looking at different kinds of structures in deals, such as taking part in club deals for example.

“We are already past the period of increasing our portfolios and we are now looking at developing new structures,” added Tang.

“They’ve been educating themselves and are now more structured and looking for higher credit quality,” concluded NorthCape md James Stove-Lorentzen Jr.