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South Korean banks to boost ship financing

South Korean banks to boost ship financing
State-owned banks of South Korea like Export-Import Bank of Korea and Korea Development Bank are mulling the expansion of their ship financing portfolio, reports said.

The Export-Import Bank of Korea is considering a KRW500bn ($442.6m) financial aid for the country's shipping companies, extended in the form of asset-backed loans, with the possibility of using long term lease contract as collateral. This is aimed at going beyond just extending loans to cash-strapped companies.

Meanwhile, privately-run ship funds like Asia Pacific 25 and North East Asia 44 have gotten approvals from the Korean government to take a total loan of KRW347.7bn from Korea Development Bank, Korea Finance Corporation and Kookmin Bank, plus funding from institutional investors through private placement.

The ship funds will then invest in 10 units of 50,000 dwt product carriers to be built by Hyundai Mipo Dockyard.