Chinese lease finance houses face stalemate in an effort to provide financing for a $5bn Norwegian Cruise Line (NCL) order at Fincantieri and the two most recent ships in a smaller series that Viking Ocean Cruises has contracted with the Italian yard.
TradeWinds understands that the two cruiseship owners have been in talks with practically all the principal names in ship leasing but have stepped back from any deal as the Chinese financiers find their financial capacity strained and also struggle to be competitive on pricing.
China Merchants Bank Financial Leasing (CMB FL) is widely believed to have come the furthest on at least one of the cruise projects.
However, sources close to the company say that such tonnage would be of much interest, but only with partners, and no letter of intent has been signed.
In the case of the NCL series, some financiers believe it is studying a bond issue to finance its order.
TradeWinds reported last week that NCL had ordered four firm 140,000-gt cruiseships at Fincantieri for EUR 800m ($840m) each, with two options. Deliveries start in 2022.
Lease finance players say they have been aware of the order for several months through a series of preliminary sessions with NCL.
Significantly, the order has no exclusively Chinese connection and financing it would mark a new advance for the international ambitions of Chinese leasing ship finance. But despite very deep pockets, the mostly state-owned lessors work within per-project limits, and leasing executives tell TradeWinds the NCL order is so big, it must be syndicated among several houses.
Another ball that is still in the air is the Viking Ocean Cruise series of 47,800-gt cruiseships, six on order so far, that have been rolling out from Fincantieri since 2015 and are set to continue until 2018.
TradeWinds understands that the first two ships in the series were already financed by ICBC Financial Leasing (ICBC FL) and CMB FL but that the former is not interested in further Viking ships. A number of leasing houses are looking at the next two ships in the series, but at EUR 300m per ship, it is thought unlikely that a single financial leasing company would take on both.
The major ship finance players among the Chinese leasing houses are urgently trying to diversify their portfolios, currently dominated by standard tonnage in the oversupplied bulker, offshore and containership markets — and to a lesser degree in tankers, where the finance houses see signs of over-capacity as well.
Leasing players mention asattractive targets a range of specialised tonnage types, including cruise, ropax, ro-ro and even livestock carriers.
Previously, the only significant Chinese lease financing for cruise newbuildings had been a 2014 deal by ICBC FL to finance up to two ships in a Silverseas series, also at Fincantieri.
The first, the 40,700-gt, 596-passenger Silver Muse (built 2017) is set to be delivered in March, but TradeWinds understands Silverseas is not interested in exercising its option on lease financing of a second ship in the series.
It recently announced that it would refinance the Silver Muse and buy back one older ship financed through ICBC on a sale-and-leaseback basis with the $550m proceeds of its first ever public bond issue.
