Banks Go Nationalistic?

Banks are still very cautious towards lending to the shipping industry. But for it’s not all grim for the shipowners, especially those who are big and established. There are some anecdotal evidence that Asian banks have been stepping up efforts in supporting their domestic shipping clients especially in India, Taiwan, Thailand and Malaysia.

Shipping companies in these countries have ample access to competitively priced loans from their local banks and many of these loans especially in Taiwan and Thailand are structured in the form of club deals. Club deals are preferred because it is a more intimate arrangement with fewer participants and every participant has an equal status, share returns and diversify risks. Syndication deals on the other hand remain difficult to put together due to the recent unsavoury experience banks encountered in reaching a consensus when dealing with covenant breaches in a bigger group. Likewise, demand for syndication deals from Asian owners appears to be lacking and there is a preference to work with bankers they are familiar with. Asian shipowners seem to have been affected by the difficulties created by syndicates during the troubled market.

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