Higher finance costs harm shipping industry
Tighter lending policies will make it more expensive for shipping companies to raise the $300 billion of debt needed to fund outstanding orders for new ships. Some predict borrowers will be able to raise only half this amount.
The subprime-induced credit squeeze will mean higher costs to finance new ships and cancellations of some orders as owners struggle to secure financing, a shipping conference in Hong Kong was told recently.
Graham Porter, managing director of Seaspan Advisory Services, said that, by his reckoning, new ships on order over the next three years totalled some $450 billion-$500 billion and that $300 billion of debt would be needed from ship financing banks.
Porter, who was chairing a panel discussion at...
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