FInAnCe


Holistic solutions A


Standard Chartered continues to build its ship finance business with the addition of leasing


relatively new player in the ship finance arena, Standard Chartered Bank, has quickly built up its loan portfolio inAsia and has now


complimented this with a leasing capability. “Last year was an active year for the shipping


finance business we did more business than we did the year before that, substantially more than 2009,” says Leon Koay, Standard Chartered’s regional head shipping finance for South and Southeast Asia. Koay says the bank saw activity across all sectors, including tankers, containerships, bulkers, LNG and offshore vessels.Geographically activity spread across Asia from Korea through to India, and the Middle East and Africa. The bank has tended to look for deals where


assets have long term secure employment.This has meant it doing business with a lot of commodities players,many of which it already had dealings with in other business lines.“So we found ourselves dealing with many industrial shippers who already have a fleet or have a habit of chartering a base load.Their orders were basically well within the framework of plan to use a certain base load over the next 5 to 10 years,” Koay explains. An example of such a deal was with an


undisclosed Indian commodities player where the bank helped arrange financing for capesizes it was building in China. Standard Chartered was able to help introduce the Indian company to Chinese banks supporting the Chinese shipbuilding industry. “That is where we see ourselves offering value to our clients bridging the networks across Asia.A lot of players use Singapore as their intermediary for their China – India interactions and we find ourselves playing a meaningful role in those flows,” he says. Looking into 2011 and Koay says it has been an


interesting year so far and he expects it to get more interesting as it progresses.As with last year activity is expected across the board although it is the offshore sector that is expected to be most buoyant.Other sectors such as dry bulk shipping face a more uncertain year on the back of overcapacity issues. In terms of doing new deals Koay says the bank continues to be supportive of various segments.


“Obviously we have criteria we have developed over the years and we expect to continue applying to our lending decisions.The challenge there is balance what those borrowers need against what we can offer by way of credit support.” One of the ways the bank been


able to grow its offerings to the market has been through the setting up of a leasing business. Established in the second half of last year the leasing business is headed up by Sander Scheepens,who moved from running DVB Bank’s ship leasing business in Singapore. “In the course of building up our


shipping debt business many of our clients had indicated they very much value the ability for the bank to offer operating leases,” Koay says.“We have found that now with our combination of debt and leasing now we are able to put together different jigsaw puzzles for different clients at different times. It offers us an agility we did not have before.” Since the leasing business was set up four deals


have been done including a sale and leaseback deal with Hong Kong commodities giant Noble Group.The most recent deal has been with Indonesia’s largest shipowner Berlian LajuTankers. The $93.5m transaction involves the lease of the four chemical tankers for 7 to 11 years on a bareboat charter basis.The deal was announced shortly after a $685m senior debt financing package.“We wanted to offer them some holistic solution as to how they went about their capital raising,” Koay says. “Standard Chartered Bank’s differentiation lies in


our ability to customise solutions that cater to the varying needs of our clients.Our distinctive offering often includes a combination of standard shipping finance and ship lease with other services, such as cash management and financial market services, all drawing on the expertise from across the bank,” comments Scheepens,managing director and head of ship leasing for the bank.


Seatrade Singapore Report 2011 25


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