Bank Debt: Bankers Work Harder to Arouse Owners

The capital markets open and close, depending on interest rates, flow of funds, and occasionally even the fundamentals in the shipping market! But at the same time that these high profile booms and busts are occurring in the canyons on Wall Street and making headlines in both the trade and mainstream press, commercial bank debt continues to form the bedrock of capital on which the shipping business is built. Dealogic reports that in shipping over $60 billion of commercial bank loans were executed in 2005; add in the equity portion of these loans and the total enterprise value swells to about $90 billion. Compare this staggering number with the $10 billion – an all-time record – of debt and equity deals that were closed in the capital markets.

Commercial bank debt is the most important capital source of shipping and, like a vessel and her crew that are doing their job well, it remains invisible almost all of the time.

This is only an excerpt of Bank Debt: Bankers Work Harder to Arouse Owners

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