Traditionally, the most common way of financing ships has been through debt and equity financing. However, over the past decade, ship leasing has become a very significant competitor and alternative for the provision of finance for the acquisition of ships. Recent market studies are expecting the global ship lease market to grow at a significant pace over the next five years – and that is already taking into account the expansion of Chinese leasing companies into the market over more recent years as well as the potential impact of Covid-19.
Recognising this growth and appetite for ship leasing transactions, the world’s largest international shipping association, BIMCO, set its sights on developing the industry’s first ship sale and leaseback standardised term sheet. The sale and leaseback term sheet ‘SHIPLEASE’ was released last month and will be rolled out to support shipowners, leasing companies, financial brokers and lawyers when negotiating and drawing up sale and leaseback agreements.
But what is ship leasing and why is it such a strong trend in shipping? We explore this growing market and look at what is in store for market players in these new and challenging times. Continue Reading