Structured Finance in Shipping
A key characteristic of the shipping industry is that it is highly capital intensive. The international shipowning community is at all times in need of significant amounts of capital in order to fund its fleet modernization and expansion strategy as well as to refinance its existing trading fleet. Traditionally, shipowners have satisfied their ship financing requirements through their own (or family and friends) equity resources as well as on bank debt finance, which represents the cheapest form of external capital when compared to other alternative sources. With China formally entering the World Trade Organization (WTO) in 2001, the international shipowning community was faced with an increased demand for its services, as it was called upon to assist fueling and facilitating the so called BRICs' (Brazil, Russia, India and China) tremendous growth.