DNB Markets has set up a new dedicated platform for debt advisory.

The team will help clients identify and achieve the ideal financing structure.

“It is a trend that is coming here in the Nordics. There is a bigger demand for debt advisory services now than before. More and more clients will absolutely use it within shipping, offshore and energy,” Dag Thomas Michalsen, co-head of debt advisory, said in an interview at DNB’s headquarters in Oslo.

Michalsen joined DNB in January from Norwegian private equity firm HitecVision, where he was a partner and head of credit.

Previously, he worked with debt origination and structuring at DNB for more than a decade.

Michalsen will lead the team with the other co-head of debt advisory, Christian Astrup.

“If clients have strategic, large newbuilding or tender processes, there is a big undertaking that must be done regarding financing,” Astrup told TradeWinds.

“We can help in complex financing situations that require a lot of resources, assessments, knowledge and relations. Our advice is objective and unbiased as we have reach and know-how for all relevant debt instruments,” he said.

The team plans to hire more people and will focus on DNB’s key sectors, which include shipping, ocean energy, renewables and infrastructure.

“The demand from the shipping sector is good. The industry has more and more sponsors, financial sponsors, funds and private equity,” Michalsen said.

“A lot of shipping can also be classified as infrastructure. That opens up a lot of new doors to alternative and interesting financing structures,” he said.

Investors are willing to expand their definitions of infrastructure to widen their investment universe, according to Michalsen.

“There is a potential for more clients within shipping. And those clients often use debt advisory services, both private equity-owned companies and funds that buy infrastructure,” he said.

Last year, DNB advised on the take-private of GasLog Partners and a $332m refinancing for Altera Shuttle Tankers.

In 2022, the investment banking unit advised EQT on the NOK 14bn financing of Nordic Ferry Infrastructure and in 2021, it helped with $1.3bn in financing when Hoegh LNG was taken private.

Starting in 2024, the team will work solely with debt advisory from a direct mandate by the borrower or the sponsor.

“A dedicated team will be a better offering to the clients. Because we only focus on this,” Astrup said.

DNB sees a need for more debt advisory services as the sources of capital have diversified.

“Before, especially within the maritime industries, everyone borrowed from the bank. That was how the industry worked. And then came the bond market which became a new source of capital. In recent years we have seen more institutional capital finding its way to the maritime industry,” Michalsen said.

“You have to know about the whole spectrum of financing and what is possible to do in order to get the most optimal debt financing structure.”

The shipping sector is enjoying good conditions for financing at the moment. The markets are booming and the companies have plenty of cash.

In addition, the banks are willing to boost their shipping loan portfolios while many credit funds demand more bonds from the sector.

“Generally there is a lot of capacity for investing in and lending to the shipping industry among all investors and all instruments. We always find sufficient capacity,” Astrup said.

“For good projects with good names and good structure, we have never had any problems getting bank financing,“ he added.

“There is more than enough capital out there. It’s more an issue of finding the right solution and combination.”

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