Commodities

Providing agile financing to propel Nordic venture into crude carrier market

Macquarie's Shipping Finance team – part of Commodities and Global Markets – provided a $US58 million senior secured loan to facilitate a Nordic-based venture's acquisition of a very large crude carrier

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SectorCommodities
Sub-sectorShipping
LocationThe Nordics

Opportunity

A Nordic maritime and energy focused investment bank partnered with an energy investment company to enter the crude oil transportation sector. The Nordic venture was looking to acquire a VLCC (very large crude carrier) to enable a major global trading house transport crude oil.

The increasing scrutiny of crude carriers' contribution to air pollution has led to stricter regulations and the adoption of cleaner technologies to reduce their environmental impact. The VLCC is fitted with a scrubber, an increasingly popular gas cleaning system in vessels designed to remove harmful air pollutants, such as sulphur oxides, from the ship's exhaust gases.

Approach

Following a successful transaction earlier in the year, which Macquarie’s Shipping Finance team financed for the investment bank, the bank approached Macquarie again for financing for the VLCC acquisition.

Within a matter of weeks, Macquarie structured and approved a five-year senior secured loan of $US58 million, offering a 70 per cent loan-to-value ratio (LTV).

Outcome

Macquarie’s agility allowed for the efficient closing of the transaction, enabling the venture to purchase the VLCC from a Greek tanker management company through a competitive process.

This transaction, marked by an LTV as high as 70 per cent, demonstrates Macquarie’s Shipping Finance team’s deep knowledge of crude carriers and the measured risk the business is prepared to underwrite.

~320,000

deadweight tonnage carry capacity of the vessel

3 weeks

from term sheet to deploying capital

$US58 million

value of the senior secured loan

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