International Clients June 2015 Ship Finance Update

Gust Biesbroeck, Global Head of Transportation, ABN AMRO Bank

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Trends

2014 – record year for Volume, 2015 Ship finance off to a very good start in a number of the key sectors

New banks are slowly joining the market

Spreads tighter, leverage increasing (for the right names in the right sectors)

Companies are becoming more transparent

Institutional Investors Euro and US private placements for the right names/structures (even below investment grade)

Healthy competitors are buying assets from distressed situations – financing and operational strength are key drivers

Fleet refinancings driven by M&A activity

ECB regulatory considerations for solvency and match funding

Key Trends in the Shipping Market

Source: Dealogic search by number of deals. Deal Value represents fully apportioned values

Shipping Loans LTM (May 2015)

Pos. All Bookrunner No. Total Deal Value

(USD bn)

1 DNB Markets 20 4.7

2 Nordea 18 3.7

3 ABN AMRO Bank 11 2.4

4 ING 7 1.6

4 KfW 6 3.4

4 Credit Agricole CIB 6 3.5

4 Sumitomo Mitsui Financial Group 5 1.7

8 DZ Bank 5 1.0

9 SEB 4 1.4

9 Danske Bank 4 0.7

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Syndicated Loan Market Update for the Shipping Sector (1/2)

Global volume and number of deals Volume

Syndicated loan volume in the shipping sector is gradually recovering from the crisis and has reached a record volume of ~USD 32bn in 2014

Q2 2015 shows continued strong activity in the shipping sector, with especially the tanker and the container market benefitting from lower oil prices

The dry bulk market is still suffering from overcapacity and low economic growth

The largest transactions in 2015 were closed for various passenger cruise vessels owned by Norwegian Cruise Line, Royal Caribbean and Stena. Dorian LPG closed the 4th largest transaction for the acquisition of 18 VLGCs

0

50

100

150

200

250

300

0

10

20

30

40

50

60

2007 2008 2009 2010 2011 2012 2013 2014 2015

Q1 Q2 Q3 Q4 # Deals

USD m # deals

Source: Dealogic and ABN AMRO Loan Syndications

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Market pricing for syndicated ship financing has generally come down and is currently in the 175 to 350 bps range

Pricing varies greatly between companies and sectors, with e.g. container vessels and dry bulk carriers on the high side and LNG vessels at the lower end of the range

Loan tenors for commercial financing are concentrated around 5 to 7 years

Longer tenors can be obtained on the back of ECA covers and long term charters with strong counterparties

Repayment profiles are generally up to 18 years, longer profiles selectively available for established companies and against lower leverage

Loan-to-value range is 50 to 70%. Strong contract coverage can increase leverage to 80% in selected cases

Syndicated Loan Market Update for the Shipping Sector (2/2)

Syndicated shipping loans by tenor Pricing and tenors

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012 2013 2014 2015

0 - 1 yrs 2 - 4 yrs 5 yrs 6 yrs7 yrs 8 - 9 yrs > 9 yrs

Source: Dealogic and ABN AMRO Loan Syndications

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Syndicates led by global shipping banks, supported by local players

Americas

Europe

Nordics

Greece

Asia-Pacific

Indication of most active banks per region Source: Dealogic

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Liquidity in the banking market

Liquidity is scarce and comes at a price

Leverage relatively low (50%)

Employment requirements are difficult to meet since companies don’t want to fix at these levels

Limited number of banks in this sector

Dry bulk shipping Given strong tanker performance, banks are quite

eager to finance

Consolidation in the market generates larger operating platforms leading to larger syndicated transactions

Terms and conditions becoming more borrower friendly

− Tighter spreads

− LTV’s up to 65-70% on young vessels

Crude tanker shipping

Source: ABN AMRO, Clarksons, Bloomberg

Bank interest is returning but is very name specific for both the operator and the charter counterparty

50-70% LTV’s for LT Contracts

Spreads tighter in general

Container Market Typically project finance structures with LT contracts

and strong charter counterparties

Larger transactions and good interest from banks

LTV’s up to 75%

Structure can include senior and junior facilities

Good ECA appetite

LNG shipping

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Ship recycling – a big trend in shipping in 2015 (1/2)

‘One-stop-shop’ solution for green ship and rig recycling (core activity), including cash-buying funded by ABN AMRO

Inventory of Hazardous Materials (IHM)

Audit of yards

Consultancy services

Ship- and rig-owners Cooperating with yards in China, Turkey and Lithuania

Audit and consulting services

Ship and rig recycling yards

Grieg Green is a provider of environmental recycling services for ship-owners, owners of maritime installations and ship and rig recycling yards.

Grieg Green offers ship and rig owners recycling services that are financially and operationally viable.

The company maintains a strong focus on environmental and sustainable aspects of shipping and is committed to the UN Global Compact’s principles.

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Ship recycling – a big trend in shipping in 2015 (2/2)

Grieg Green is part of the Grieg Group, which also consists of Grieg Star, Joachim Grieg & Co, Grieg Seafood amongst others. The company has its head office in Oslo with a technical department in Shanghai.

ASPEN ARROW GEARBULK

RECYCLING/ IHM COMPLETED

STAR AMERICA GRIEG STAR

RECYCLING/ IHM COMPLETED

VIGDIS KNUTSEN KNUTSEN

RECYCLING/ IHM COMPLETED

BARU KLAVENESS

RECYCLING/ IHM COMPLETED

NORMAN LADY HÖEGH LNG

IHM/ SUPERVISION COMPLETED

MCC LUZON MAERSK GROUP

CONSULTANCY COMPLETED

ATWOOD S. CROSS ATWOOD OCEANIS

RIG RECYCLING COMPLETED

C. KIRK RHEIN TRANSOCEAN

RIG RECYCLING ONGOING

ATWOOD HUNTER ATWOOD OCEANIS

RIG RECYCLING ONGOING

HÖEGH TROTTER HÖEGH AUTOLINERS

RECYCLING/ IHM COMPLETED

HAN YANG SINOKOR

RECYCLING/ IHM COMPLETED

ATLANTIC SUPERIOR CSL AMERICAS

RECYCLING/ IHM ONGOING

Some of the completed and ongoing projects since the start-up in 2011

contact details: www.grieggreen.com

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2014

Underwriter / BMLA / Doc. Agent / Facility Agent

Senior Secured Term Loan

Facility

USD 75 million

2014

MLA

Term Loan and Revolving

Credit Facility

USD 450 million

Avance Gas

2014

Lead Arranger

Acquisition Financing Facility

USD 325 million

2014

BMLA / Security Agent

Senior Secured Amortizing

Credit Facility

USD 172 million

2014

BMLA

Senior Secured Amortising

Credit Facility

USD 412 million

Revolving Credit Facility

Term Loan

USD 225 million

2014

Joint Lead Arranger / Joint Underwriter

2014

MLA / Swap bank

Senior Secured Term Loan

Facility

USD 284 million

Selected Syndicated Loan credentials in the Transportation sector (1/2)

BMLA

2014

Term Loan Facility,

Revolver

USD 380 million

2015

MLA / Coord. / Doc. Agent / Facility Agent

Senior Secured Term Loan

Facility

USD 425 million

2015

BMLA / Fac. & Sec. Agent

Senior Secured Credit

Facility

USD 86.4 million

2015

BMLA / Fac. & Sec. Agent

Secured Credit Facility

USD 28.8 million

2015

BMLA

Senior Secured Credit

Facility

USD 120 million

Nautical Bulk Holding

2015

MLA / Security Agent

KEXIM Supported Secured

Term Loan

USD 390 million

18x chemical tankers

MLA / Bookrunner / Agent

USD 127 million

Senior Secured Bridge Loan

2015

Global Coordinator / Agent

USD 758 million

ECA / Commercial Loan

2015

http://www.gaslogltd.com/index.php

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Selected Syndicated Loan credentials in the Transportation sector (2/2)

2014

BMLA

Term Loan

USD 300 million

2014

MLA

Revolving Credit Facility

USD 200 million

2014

BMLA

Senior Secured Term Loan

USD 101 million

2014

MLA

Revolving Credit Facility

USD 100 million

2014

MLA

Term Loan

USD 467 million

2014

BMLA

Senior Secured Term Loan

EUR 200 million

2014

BMLA

Senior Secured Term Loan

USD 225 million

2014

MLA

Term Loan

USD 172 million

Fertecks Shipping Inc

2014

MLA

Senior Secured Facility

USD 250 million

MLA / Hedge Provider

2014

ECA / Commercial Loan

USD 815 million

Offshore Partners L.P.

2014

MLA

Senior Secured Term Loan

USD 420 million

2014

BMLA

K-sure Covered

Secured Term Loan

USD 200 million

2014

BMLA

Revolving Credit and Term

Loan Facility

USD 1.5 billion

2014

MLA / Fac. & Sec. Agent

Senior Secured Term Loan

USD 141 million

2014

BMLA / Doc. Agent / Facility Agent

Senior Secured Term Loan

Facility

USD 45 million

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2014

Co-Manager

Senior Unsecured Notes

7.250% April 2022

USD 375 million

Navios South American Logistics Inc.

2014

Co-Manager

Senior Secured Notes

8.125% November 2021

USD 60 million add-on

Navios Maritime Acquisition Corp.

2014

Co-Manager

ABS

Due in 2024

USD 500 million

2014

Co-Manager

ABS

Due in 2023

USD 300 million

2014

Co-Manager

ABS

Due in 2024

USD 300 million

2014

Co-Manager

ABS

Due in 2024

USD 266 million

Selected DCM credentials in the Transportation sector

Asset Backed Securities High Yield Bonds

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Final comments

Ship Finance UpdateKey Trends in the Shipping MarketSyndicated Loan Market Update for the Shipping Sector (1/2)Syndicated Loan Market Update for the Shipping Sector (2/2)Syndicates led by global shipping banks, supported by local playersLiquidity in the banking marketShip recycling – a big trend in shipping in 2015 (1/2)Ship recycling – a big trend in shipping in 2015 (2/2)Selected Syndicated Loan credentials in the Transportation sector (1/2)Selected Syndicated Loan credentials in the Transportation sector (2/2)Selected DCM credentials in the Transportation sectorFinal comments