European Banks Rule Shipping Credits

B+H Ocean Carriers would turn only to its trusty European creditors ­Nordea Bank Norge ASA, DvB Bank, HSH Nordbank and Bank of Scotland ­when looking for a new financing.

  • 01 Sep 2006
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B+H Ocean Carriers would turn only to its trusty European creditors ­Nordea Bank Norge ASA, DvB Bank, HSH Nordbank and Bank of Scotland ­when looking for a new financing. "We've been dealing with these banks for 10 years," John LeFrere, director at B+H said. "They are all very old, very good, very knowledgeable shipping banks and that is the principal reason we have dealt with them and deal with them."

Bristol, R.I.-based B+H used part of the $202 million credit facility to finance a new vessel acquisition announced in early July.

The new debt also refinanced existing lines, as well as provided additional cash for expansion plans, LeFrere explained. The new facility was increased from the previous one, which was about $125 million, according to LeFrere. The increases included $27 million for the newly acquired ship and $50 million for future fleet expansion.

LeFrere would not disclose exactly what pricing on the deal was, but said "the Europeans are pretty standard in their lending. Certainly with our EBITDA...we are considered a very good credit." B+H's EBITDA as of June 30 was $23.9 million, up from $16 million the previous year, according to a release. He implied that pricing was probably in the range of LIBOR plus 1 1/4-1 3/4% and hadn't changed much from the previous facility.

"In the shipping industry, there are virtually no U.S. banks left," LeFrere said. "European banks are very smart in this business. It's very good to have a committee that you don't have to educate about your business." LeFrere said he thought the lead banks could probably pull up a 20 year history of every ship in B+H's fleet.

"We've spent decades creating relationships with these people. If they don't know you and they don't trust you, they won't lend to you," LeFrere said, pointing out the differences between U.S. banks and European lenders. "For an extra 150 basis points you can get people to do crazy stuff [in the U.S.]. They aren't junk lenders over there [in Europe] ­ they either like the credit and will go with you or you'll just see them pass."

  • 01 Sep 2006

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 4,755 19 11.75
2 Citi 4,288 14 10.60
3 Rabobank 2,633 4 6.51
4 Goldman Sachs 2,615 4 6.46
5 Barclays 2,603 8 6.43

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