2021 was a boom year for shipping in capital markets, but Fearnley Securities is sounding a warning on a potential downside for owners.

With bonds trading near all-time highs and earnings and asset prices at elevated levels, the only way might be down, it said.

The Norwegian investment bank described last year as "active" for owners, with almost $11bn of fresh capital raised for industrial and commodity shipping.

This was split evenly between debt and equity, with total volumes up 60% from $7bn in 2020.

Container shipping was by far the most active segment, with more than $6bn raised through bonds, initial public offerings (IPOs) and private placements.

This was largely driven by owners' huge appetite for expansion and efforts to stabilise supply chains, analysts Peder Nicolai Jarlsby, Erik Gabriel Hovi and Ulrik Mannhart said.

The most significant contributions include $2bn in private placements by Asian boxship operators Yang Ming, OOCL and Cosco, as well as US-listed Seaspan Corp's four bond issues amounting to $1.8bn.

The IPO arena was again quiet in terms of volume, with just $700m raised from five listings globally.

Israeli container line Zim kicked off the year with its $218m float in New York in January, which later turned out to be one of the year's greatest success stories with a 349% gain on the stock.

This was followed by Tor Olav Troim-backed bulker owner Himalaya Shipping and car carrier player Hoegh Autoliners listing in Oslo.

Big players selling bonds

On the credit side, shipowners have proactively issued and refinanced bonds to lock in record low interest rates, Fearnleys said.

This was demonstrated by AP Moller-Maersk's €500m ($565m) 10-year unsecured bond at 0.75% and Hapag-Lloyd's €300m, seven-year unsecured bond at 2.5%.

"While liners and lessors within container [shipping] were dominant, the bond market has been open for all segments with significant volumes raised within ... dry bulk, tankers, car carriers and LNG," the analysts said.

The bond market was characterised by all-time high pricing throughout 2021, and shipping has been no exception.

The overall record tight pricing has been driven by huge capital inflows and low interest rates, Fearnleys explained.

Seaspan and Greek owner Danaos entered the Norwegian and US bond markets to diversify and leverage their capital structures.

The majority of bonds have been unsecured as shipping banks have returned to vessel finance with increased appetite.

"While most issuers in our space look well prepared for 2022, we see asymmetric risk for the bonds trading at or close to all-time high pricing, with potential interest rate hikes on the horizon," the analysts said.

"Historical high asset values and earnings add to this with further downside risk and limited upside."

Fearnleys said upside potential and double-digit yield opportunities are rare to find for now, but owners such as Seaspan, Danaos and Diana Shipping are paying attractive cash coupons with historically low default risk.