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China Exim Bank pledges support for higher value vessels

China Exim Bank pledges support for higher value vessels
The Import & Export Bank of China will continue to lend support to higher value ships and offshore units, in view of the current market climate of an oversupply of conventional vessels.

Chen Bin, deputy chief of traffic & shipping at China Exim Bank, said the bank has seen a marked increase in loans to higher specification vessels over the past year.

“There is a very serious overcapacity problem in the conventional shipping segment, and the problem will not go away if owners continue to order more vessels,” Chen told delegates at Marintec China 2013 in Shanghai on Thursday.

“We aim to support more specialised vessels such as LNG carriers, LPG carriers and offshore vessels,” he said.

From January to October this year, the Chinese bank signed deals of close to RMB10bn worth of financing for higher value units, amounting to about 80% of the bank's total portfolio. The deals include six LNG vessels, four semi-submersible platforms, four containerships of 10,000 teu capacity and above, and four VLCCs.

Compared to the whole of 2012, the higher value deals were worth about RMB7bn and accounted for 55% of the total portfolio.

“Under the current challenging market conditions, banks need to be more cautious on extending loans in order to manage counterparty risks and mitigate payment defaults,” Chen said.