Senior debt from Chinese banks
Are Chinese banks there to offer foreign owners debt finance? The answer is yes, to vessels built in China or with other Chinese elements. Because it’s not only Chinese government policy, but also opportunity for Chinese banks to gain market share in shipping while European banks have limited liquidity. The financing for foreign owned second-hand vessels are not common yet, but it’s consideration for some overseas branches.

Some western owners who already talked with Chinese banks might find the process is slow and no deal within certain time frame. Why? It could be they didn’t talk with the right banks, or simply because Chinese bankers are too polite to tell they are not interested in such project at the beginning. Some banks prefer big clients, some have geographic preference, some branches only do refund guarantees and other need Sinosure guarantee.

To start the financing process with the banks, we review the project and clients profile, recommend the right banks that might be interested in this type of project/clients, and make an initial check about interest. After identifying interest from the banks, we’ll assist with document preparation and get initial term sheets. Through the process, we help with the negotiation and push the process to reach acceptable terms for owners.

We work with different banks, including China EXIM, Bank of China, ICBC, China construction bank, CDB, and other leasing arms of ICBC, Minsheng Bank and China Merchants Bank.

Depend on different clients and projects, different deal structures could be arranged. Sometimes a strategic cooperation agreement with banks could bridge your future financing need and build up bank relationship while no immediate financing need; Club deal/syndicate loans together with Chinese banks and your existing European banks could be another option to smooth the deal.

Chinese banks will involve more and more in international ship financing market. Banks need to learn more about the market and foreign shipowners. Owners should understand thoughts and practice of Chinese bankers. We’re here to smooth the communication and the process to make deals.