First Citizens Bank has won another bilateral loan with a New York-listed container ship company but apparently lost out on a bigger prize.
Even as First Citizens’ Manhattan-based maritime finance business revealed the $22m financing with Greek owner Euroseas, shipping chief Evan Cohen was appearing on a lenders panel at Marine Money Week in New York.
It was there that he revealed First Citizens had made a play for Dutch lender NIBC’s $992m shipping loan portfolio, which ended up going to Hamburg Commercial Bank (HCOB) instead.
“We look for portfolios,” Cohen answered as bankers were questioned about how they are able to grow their business at a time when cash-rich shipowners are aggressively paying down debt.
“Sometimes we come in second place, which we did with the NIBC book, so congratulations to Hamburg Commercial Bank. You look for opportunities like the NIBC portfolio.”
The portfolio was acquired through a multi-stage competitive bidding process, HCOB revealed in a statement this week.
Blackstone, the world’s largest private equity firm, agreed to acquire NIBC in 2020 for about €1bn ($1.1bn).
In May 2023, Blackstone was reported to be exploring options for the bank, including a potential sale, according to Bloomberg.
Early repayment
HCOB is yet another bank that has seen cash-rich owners repaying loans early in strong markets, cutting its exposure.
By the completion of the NIBC deal at the end of June, HCOB said the combined shipping book will account for about 10% of its total assets, in line with previous years.
The acquired loans will reduce HCOB’s portfolio share in container ships in favour of bulk carriers and chemical tankers.
First Citizens has had more success in the portfolio-acquisition game in the past. The company, then still known as CIT Bank, announced in June 2023 that it had acquired $123m in loans from the Greek shipping book once held by HSBC.
At his Manhattan office in April this year, Cohen told TradeWinds about the challenge banks like his face in building the book.
The former DVB banker said that First Citizens had logged only modest growth — from $1bn in March 2021 to $1.2bn in April.
“Most lenders in the world face the same avalanche of repayment,” Cohen told us. “Everyone’s running really hard just to stay in place.”
Small bilateral deals, such as the one announced this week with Euroseas, might not move the needle like portfolio purchases, but they add up.
First Citizens said the deal would finance a 2,800-teu “eco” container ship.
Euroseas’ chief administrative officer Symeon Pariaros said: “Demand for cargo transport is growing and we are expanding our fleet to serve that market growth by investing in top-quality ships that considerably reduce our carbon footprint, showing our commitment to decarbonise our industry while serving the interest of our shareholders in the most accretive way.”
He credited the “expertise and agility” of the First Citizens team.
“Euroseas has a strong and growing reputation as a world-class owner and operator of high-quality container vessels,” Cohen said.
