In the current market up cycle, competition among shipping lenders is fierce, according to Danske Bank.

Shipowners are generally making a lot of money and company balance sheets are more robust.

Einar Stavrum, Danske Bank global head of shipping, said in an interview with TradeWinds at his office in Oslo: “Now, with improved credit metrics, shipowners require less debt capital yet are more attractive to banks as debtors.

“This results in a higher concentration of appealing capital offers from banks to these clients.

“It is constantly a supply and demand balance. At the moment it is to the shipping clients’ advantage,” he said.

Stavrum leads Danske Bank’s shipping team of 10 based in Oslo.

“The same banks seek to finance the same clients, which naturally puts our clients in a strong negotiating position. This advantage is reflected in the terms of financing, including loan margins,” he added.

Stavrum expects future newbuildings to boost the need for shipping loans in the coming years.

“Some segments have pretty large orderbooks and we have started to see some financing of newbuilds,” he said.

Even if vessel deliveries are scheduled for 2026 and 2027, shipowners begin to look at debt financing of these newbuildings 12 to 24 months ahead, according to Stavrum.

“There is a need for capital in the sector because the fleet must be renewed. There will be a persistent need for bank financing,” he said.

The Copenhagen-based lender has a shipping and offshore loan book of about $4bn.

“We have had a relatively stable loan book within the shipping segment. We see that we should be able to maintain a stable portfolio. And hopefully, we can grow it a bit,” the banker said.

There is healthy competition among the Nordic banks, according to Stavrum.

Danske Bank focuses on larger shipping clients in the Nordics.

“The Nordic, and to some extent the European, banks operate in the same regulatory environment, which impacts return requirements and loan margins that can be offered,” he said.

“Then there are other regions and financing sources that operate under other regulatory frameworks and market conditions. For some time there has been strong competition from Asian financing sources such as leasing institutions, and banks in some transactions,” he explained.

Danske Bank offers full services to its shipping clients, from loans, bonds and capital raises to risk hedging and advisory services.

The bank was involved in DOF Group’s merger with Maersk Supply Service.

It is one of the lenders in DOF’s new $500m debt facility and it was a joint bookrunner in the $100m private placement.

“The offshore sector has been through a wave of consolidation. It is transforming from a more fragmented sector to fewer and stronger companies,” Stavrum said.

Stavrum has worked with shipping banking since the 1990s.

“It is an exciting industry. It is a volatile industry, which is something you have to learn to live with both as a shipowner and lender,” he said.

In 2006, Stavrum joined Danske Bank from Nordea.

“It is more professional now compared to the 1990s. There are bigger companies now that are listed. It has been a very positive development in the past 10 to 15 years in terms of building larger and stronger companies,” he added.

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