Shipping Finance and International Capital Markets

The chapter revisits the hot topic of shipping finance in the aftermath of the unprecedented 2008 global financial crisis, the painful Covid-19 pandemic turmoil and the devastating Ukrainian conflict. Attention is paid to the assessment of the shifting contribution of international financial markets to channel vital funding into shipping investment projects. In a highly volatile and recessionary business environment, shipping companies are inevitably challenged to explore unconventional capital source options. Following detrimental losses, induced by nonperforming ship loan portfolios, several traditional bank lenders are seen to have entirely withdrawn from or reduced their exposure to shipping business. Alternative capital providers are seen more active to fill in the banks’ gap, including Asian leasing (Chinese, Japanese, and Korean financial institutions), private equity, credit funds, export credit agencies, and green funds. Suitable financing decisions have important implications for shipping companies to attain an optimal capital structure mix, contain cost of capital, support an efficient corporate governance model, and ultimately, contribute to robust value creation and corporate growth. Disruptive challenges forward for shipping companies and investors include green vessels and fuels to environmental responsibility and compliance, ESG good practices, digitalisation and technological advances, and shaping a novel ship business model.