An Evaluation on the Significance of Fleet Age in the Context of Maritime High-yield Bond Issues PDF Download

Author: Michael Weickhardt
Publisher:
ISBN:
Category :
Languages : en
Pages : 58

Get Book Here

Book Description
The ship finance market faces a structural change rather than just a cyclical downturn. Debt -the traditional source of finance- has vanished to a large extend and new financial sources need to be exploited by ship owners in order to maintain their business. This challenge is accompanied by increased competition due to oversupply, raising bunker costs and the request for new and environmentally sustainable tonnage. Within this structural change the financing through bonds on the international capital markets has emerged to be a vital alternative. This young and promising area, however, enjoys only a minor recognition among the academic literature. The only study defining the determinants of shipping bond prices was done more than a decade ago under different market conditions. This paper expands the original regression model in order to point out which determinants drive bond prices in the maritime sector today. It was possible to find new factors of significance affecting maritime bond prices. The most important and most influential aspect is the discovery of significance of fleet age in that context. Furthermore, this paper reveals that traditional shipping companies and offshore shipping companies follow different characteristics in terms of investor requirements. For this reason, different models are evaluates and introduced in this paper.