RMK Maritime’s new ship finance venture has hit $100m in lending in its first four months, with big plans for more in the next year.
Ascension Finance’s debut lien vessel mortgage was clinched in March, and the New York and London-based company believes $500m in deployed capital is possible in 2022.
Co-founder Richard Moore told TradeWinds that there had been “incredible demand” from clients.
“Hitting the $100m milestone in just four months is testament to the quality of the team we have here, and is only the beginning as we continue to grow our offering and expand into new markets,” he said.
Ascension provides non-banking finance for shipowners, backed by investors such as insurance companies and pension funds.
So far, money has gone to private operators and is mainly used for refinancing existing tankers, boxships and bulkers.
Long gestation
Ascension was first mooted by Moore and Michael Kirk of alternative financier RMK late in 2019.
Kirk explained that the pandemic delayed its launch — but that provided a silver lining.
He said Ascension had lined up a deal with an investor in the hedge fund arena at the beginning of 2020.
“When Covid hit, that counterparty was awash with opportunities and decided to focus on other things,” Kirk said.
"We had had some conversations with various groups prior to that and, as the world moved on, we started to re-engage in some of those conversations."
Kirk described Ascension's investors as "a very robust cadre" who are looking for long-term yields.
"It's worked out well for us, because it's a much stabler investment pool that we have now," the former HSBC and DVB banker said. "It turned out to be kind of a blessing that that initial one got put on pause."
Realistic expectations
Kirk believes return expectations are more in line with reality with its current backers and this has allowed Ascension to put money to work quickly.
Moore said RMK has always had access to capital, having raised $3bn of equity for various shipowners over 10 years.
"So accessing equity was always pretty straightforward, but accessing the right kind of equity at the right pricing, the right loans, that's taken more time," he said.
Hedge-fund money is very expensive and comes with certain terms and conditions that are not conducive to long-life borrowing, the ex-Braemar Seascope shipbroker and financier said.
Some regional banks in the US may be involved in the future, but the current pool of backers numbers about half a dozen, all in the US, although the company will also look elsewhere for funds.
Better pricing
Moore said: "These are difficult guys to get hold of, so it's nice to have them and it's long-life money: better pricing and better terms."
Kirk added: "We obviously have a bunch of relationships in Europe, and we'll continue to have those conversations."
The executives said Ascension helps owners who have lost their banking relationships or do not fit into a standard “corporate bucket”.
“Our USP [unique selling point] really is that we’ve got a lot of flexibility,” Moore said. “We don’t necessarily require, for example, certain ... corporate guarantees.”
Kirk said the company has loaned money to every major commoditised ship class.
"That's going to be our continued focus," he said.
As for the $500m target, Ascension reports good enquiry levels in strong markets.
The bosses said there is a lot of buying and selling activity in boxships, and tankers are expected to improve.
$500m target in sight
"Just [with] that landscape of both new acquisitions that people want financing or secondhand ships, combined with the normal maturity of loans, we're easily seeing that as a figure that we can hit," Moore said.
He added that the company wants to stay liquid and mainstream.
"So we're not going to do passenger ferries," Moore said.
But he added that Ascension sees a logical extension from first lien debt into leasing, for example.
“We definitely have those sort of aspirations of moving forward but, at the moment, it’s building up the current portfolio,” Moore said.
RMK has advised on acquisitions for owners such as Euronav, Golar LNG and oil traders.
The team has more than 100 years of combined maritime finance experience.
Ascension uses standard loan documentation familiar to shipping companies and is flexible on loan-to-value, vessel age and employment.
The company said it can close and fund loans within 30 days of a term sheet being signed.
David Sparkes is managing director of Ascension, working alongside RMK chief credit officer Mark McCarthy.
