It has been two years since CIT Bank shipping chief Evan Cohen joked at a conference that he was bringing the maritime practice “out of warm lay-up”. The quip could not have been more apt.

He had been with the bank less than three months following his November 2018 hire, which broke a spell of 19 months without a head of ship lending at the New York bank.

Prior to that, CIT had seen three heads of its maritime group depart within 16 months.

Fast-forward 28 months and under Cohen’s leadership any sense of instability in the operation has been erased.

Steady as she goes

He has built a team of 12 in the maritime group, including four former staffers from German bank DVB, where he worked for 14 years.

CIT has built a shipping port­folio of about $1bn, handling about $400m-worth of senior debt in the course of a year with an eye on steady growth.

In short, the ship is now sailing.

TradeWinds caught up with Cohen and his progress at the CIT helm in a phone interview.

“We’re filling very much the same classic senior-lender role that I described [in February 2019],” he said.

‘We provide classic senior debt to companies in the containership, dry bulk and tankers sectors at moderate leverage between 50% and 60%. We provide both recourse and non-recourse financing, and employment is nice to have if you want higher leverage.”

No small, old or specialised, We stay away from cruiseships and offshore.

Evan Cohen

Cohen joked that CIT has a “no SOS” policy, citing a term that was quoted in his days at DVB.

“No small, old or specialised,” he explained. “We stay away from cruiseships and offshore.”

In other words, there is nothing particularly cutting edge or sexy about CIT’s business: it simply provides traditional senior mortgage debt in a landscape in which that has become increasingly hard to come by for shipowners.

One rival ship lender said of CIT: “They’re a competitor we bump up against a lot in the market. They seem to be doing well-priced, fairly conservative mortgage lending for both big and small companies and their projects.

“They’re doing a reasonable job at it. My impression is that they’re for real and are out there doing new deals.”

Gulsun Nazli Karamehmet-­Williams, majority owner of Advantage Tankers, is a client of New York's CIT Bank. Photo: TTOil Field

When Cohen launched what was essentially CIT’s third run at the ship finance market, some of the early transactions were “club deals” involving other banks such as DVB, Credit Agricole, Deutsche Bank and ABN Amro.

“That was a great introduction and way to restart the maritime platform,” he said.

From there, CIT has moved on to a diet of bilateral deals and partnerships with private equity funds in which it provides the senior debt component of a larger financing.

Cohen said financings done in conjunction with a private equity firm make up one-third of the bank’s business. An example is the $56m financing arranged in January 2020 for Advantage Tankers in partnership with Fleetscape Capital, a financing unit of giant Oaktree Capital Management.

The deal helped Advantage in the financing of what were only described as “two large vessels”.

“Private equity has evolved as a greater part of the business, but you’ll recall that Northern Shipping Funds evolved out of DVB some 20 years ago, so we were among the first in there,” Cohen said.

“It allows the deal to get done beyond our leverage comfort zone, which is typically 50% to 60%. The owner may not have all the equity that they need, so this provides the missing 30% piece.”

But CIT also does its share of bilateral deals, which have a “sweet spot” of about $35m each.

“It’s typically a small group of ships, maybe three or four vessels for that amount,” he said.

“But if you’re an existing client, we’re much more flexible in being able to adjust that sweet spot either up or down. We’ve already done the hard work of getting to know the client.”

Recent bilateral deals include February’s $45m refinancing of the containership portfolio of Mangrove Partners and a $70m deal last September for International Container Co Holdings, secured by three Maersk vessels.

CIT’s typical margin on such deals is in the range of 3.5% to 4.5%, Cohen said.

“We fit in the classic senior debt space. We’re not chasing the few names and chasing the margin down, but we’re well below the pricing of the senior debt funds.”