The Honor System

By Matt McCleery

Disclaimers first. At the beginning of every year, the Marine Money editors sift through our transaction database to pull together league tables and update our database of shipping bank loan portfolios – as you can appreciate, this exercise is more of an art than a science. First, there is the issue of how to define “marine” assets – does it include cruise? How about dredgers? How about container leasing? Where do we put rigs? How about OSVs? Our answer used to be “it needs to float,” but when one cheeky banker commented, “Hey Matt, marine containers float better than some ships,” we abandoned that definition and adopted a new one. Our new criteria to banks for inclusion is as follows: “if you think it belongs in Marine Money’s league tables, then we do, too.” Since most of the top shipping banks are marine money readers, we figure they should know as well as we do what fits into the universe. This is called “the honor system” when you are in school or self-service flower stands along country roads and the result is that these tables should be considered overinclusive. Using the honor system as our guide, marine finance deals total about $30 billion per year in new deals and the entire market for this variety of debt is in excess of $150 billion at any given time. In addition to defining the term “maritime transaction” we are always faced with the challenge of working with bilateral loans for non-public companies -which involve one lender, one borrower and a lot of privacy issues. Although we don’t present these deals individually, their volume is reflected in the overall portfolio table below.

Number & Size

2002 Syndicated
Loan Volume

Number of
Deals

Nordea

25

DnB

20

Citibank

8

Fortis

6

ING

11

HSBC

3

JP Morgan

3

2002 – Average

$m

Deal Size

JP Morgan

1100

Citibank

500

HSBC

500

ING

209

DnB

200

Nordea

192

Fortis

125

The goals of this exercise are to give banks a sense of market size and market share and to give shipowners an idea of who is actively originating new loans – and who isn’t. Once we have the number together, we slice and dice the data and make some assumptions about the size of the overall market for debt and equity investment and then attempt to characterize where capital for shipping is really coming from.

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