Overview

With access to more traditional finance limited, shipping companies are increasingly considering private equity and debt markets as a way to help them make key capital investments, whether meeting new emissions legislation or ballast water management controls or expanding their fleet to meet new opportunities. Likewise, many investment banks and bond traders are becoming alert to the significant opportunities in the sector.

The course aims to raise awareness of the substantial benefits and risks of equity and debt finance, to shipping companies looking for capital and to investors looking at shipping as a market with increasing accessibility and potentially strong returns on investment.

Led by Professor Nikos Nomikos of the Centre for Shipping, Trade & Finance at Cass Business School, Ship Finance Executive provides an analysis of the IPO and debt issuance process, the advantages and disadvantages of using the capital markets, underwriters and their role, credit rating agencies, and institutional investors.

Using a variety of real-life examples, course participants will learn how an IPO is made, what to look for when choosing an underwriter, how to identify an under-priced IPO before it is made public using only publicly available information, how to issue a high-yield bond and how to calculate the probability a high-yield bond will default.

Course Brochure 2020
 

Course leaders

Professor Nikos Nomikos       

Centre for Shipping, Trade & Finance

Cass Business School

Dr Nikos Papapostolou

  Cass Business School

Ship Finance Executive is led by Professor Nikos Nomikos of Cass Business School, director of the highly-respected Shipping, Trade and Finance MSc course and author of the leading reference book on shipping risk management – Shipping Derivatives and Risk Management.

Professor Nomikos holds a number of faculty positions at other universities, including Copenhagen Business School and the University of Geneva.

Dr Nikos Papapostolou has worked on topics such as shipping high-yield bonds and shipping IPOs and is currently working on investor sentiment in the shipping markets.

"A practical overview for shipping companies and investors on how to use the equity and debt markets"

Day One

Equity Capital Markets

Introduction to ship finance

Overview of the sources of finance available to shipping
companies

  • Equity finance (owner’s private equity, retained earnings, public or private equity offerings)
  • Mezzanine finance (preference shares, warrants, convertibles)
  • Debt finance (bank loans, export finance, public or private bond issues, leasing)

A primer on risk management

  • Introduction to derivative instruments
  • Forwards, futures, options & swaps
  • Exchange-Traded vs Over-the-Counter
  • Credit risk and clearing

Equity Public Offerings

Traditional versus liberal philosophies towards vessel
ownership and the main reasons why a shipping company
might list publicly

  • Overview of the advantages and disadvantages for
    shipping companies which go public
  • How to choose an underwriter and their role in the IPO
    process
  • Taking a shipping company public: the IPO process
  • Key factors which play a role in the success of an IPO
  • Institutional investors and shipping companies

IPO Case Study

During this session, the group will make a practical analysis of an IPO, looking at the deal structure from an investor’s point of view; what are the strengths and weaknesses of the company going public; was the timing of the offering correct; the choice of the underwriter(s); the success of the issue
 

Pricing of Initial Public Offerings

The under-pricing of shipping stocks and theories explaining the phenomenon

  •  Factors which may affect first trading day returns of
    shipping stocks
  • Identifying IPOs for investment: how to estimate the probability of an IPO being under-priced before issue
  • Practical example: illustrating how to calculate the probability of under-pricing using information available publically before issue

Day Two

The High-Yield Bond Market
Risk Management of Real Assets
Shipping Sentiment
 

High-Yield Bond Issues

  • Main advantages and disadvantages of using the shipping high-yield bond market
  • The process of issuing high-yield bonds
  • The role of credit rating agencies and the factors they
    consider when assigning ratings
  • High-yield bond defaults and restructuring options in
    shipping

Probability of Default for High-Yield Bond Issues in
Shipping

  • The main factors affecting the probability of default for
    shipping issues
  • Employing readily available information to estimate the
    probability of default prior to issue
  • Practical example: calculating default probability

Portfolio Management of Shipping Loans

  • Risk models and quantitative risk analysis of shipping
    loans
  • Project risk management
  • Cash flow evaluation for a shipping project
  • Case Study: Excel-based risk evaluation of a shipping loan
    portfolio

Shipping Sentiment

  • Quantifying shipping sentiment using market variables
  • Sentiment and shipping cycles: how to predict shipping
    cycles with the aid of shipping sentiment
  • Practical example: illustrating how the probability of
    expansion/contraction may be estimated using shipping
    sentiment
  • Using sentiment as a trading tool for the purchase and
    sale of second-hand vessels
  • Practical example: using shipping sentiment in the investment decision for sale and purchase of second-hand vessels

Terms and conditions

The Baltic Exchange must be in receipt of full payment prior to the day of the training course or your nominated delegate(s) may not beallowed entry to the event. Cancellations 14 days prior to the event will be refunded at 50% of the delegate fee. Cancellations within 14 days cannot be refunded. All cancellations must be received in writing.

Names of delegates may be changed at any time without charge and notification of name changes should be made in writing. Registration fees include lunch and refreshments and course notes.

Further questions

Please contact Bill Lines on: 
Tel:  +44 (0)20 3326 8460
Email:  [email protected]