By Dan Oliver
The 2007 party in shipping continued into the first half of 2008 with charter rates soaring to new heights. But storm clouds were already visible as the credit crunch closed its grip on the global economy and debt financing became more difficult. Bank syndicates grew in size, fees expanded, margins widened, and covenants tightened. When the music stopped in the second half of 2008, equity markets quickly identified which firms had well-structured debt and cashflows and mercilessly punished those that did not.
The worst aspect of the credit crunch for the shipping sector has been the collapse of trade finance. The export driven economies of Asia and Latin America offer the best hope for global growth, but these regions have also seen the steepest drop
This is only an excerpt of Shifting Risk – Export Credit Deal of the Year
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