German shipping asset manager Buss Group is launching its first container leasing bond to take advantage of a hot market.
With rates in some boxship classes hitting record levels as volumes recover from coronavirus disruption, the Hamburg-based company said this is the right time to strike.
The Zins 2021 bond is being sold by the Buss Capital Invest unit.
"Private investors can benefit from the currently favourable entry conditions in the container leasing market," the company said.
The interest rate is 4% over 2.5 to 3.5 years.
Dirk Baldeweg, managing partner of Buss Capital Invest, said: "The market situation in container leasing is very interesting at the moment — especially because of the corona crisis.
"Container throughput is growing again - and with it the demand for containers. At the same time, very little was built due to the corona crisis in 2020. So increasing demand meets a shortage of supply."
According to Baldeweg, container leasing is a very stable market and relatively crisis-resistant.
"Containers are only ordered when they are really needed," he said. "The market can therefore react quickly to fluctuations in demand, for example due to the corona crisis. We are currently getting in at a good time."
Putting in its own money
Buss said it is backing its own investments with a contribution of €105,000 ($123,000) as a buffer.
"In addition, an external control of the use of funds is carried out over the entire term of the investment. It controls whether the investments are made in accordance with the investment guidelines and whether the funds flow back correctly after the assets have been sold," added Marc Nagel, managing director of Buss Capital Invest.
The cash will be invested in portfolios of different containers owned by two target companies.
Baldeweg said: "With the new structure, we are improving our investment and financing conditions, thus taking into account the changed market conditions in container leasing," he added.
The planned total return flow of funds is 113.3%.
Buss Capital Invest is led by Baldeweg, Nagel and Johann Killinger, with more than 50 years of experience between them in structuring and selling capital investments in shipping, cruise and containers.
They have initiated 88 investments, 64 of which have already been successfully closed in the amount of €1.9bn euros.
Around 31,000 investors had invested a total of around €1.1bn in recent years.
