This document discusses financing and capital raising in the shipping industry after Basel III. It provides details on two acquisitions by Euronav: the acquisition of 15 VLCCs for $980 million in 2014, financed with $500 million in bank debt, $235 million in bonds, and $350 million in equity. It also discusses the acquisition of 4 additional VLCCs from Maersk for $342 million, financed with $215 million in bank debt and $125 million in equity. The document concludes with a list of innovative ways for shipping companies to raise capital.

1. Financing after Basel III
FD Seminar 27 November 2014

2. Impact of Basel III

3. 2
Basel II and Basel III comparison

4. 3
Financial crisis – key dates
 9 August 2007: BNP Paribas suspends repayment of 2 subprime funds
 16 March 2008: JPMorgan buys BearStearns for USD 2
 14 September 2008: BoA buys Merrill Lynch for USD 1
 15 September 2008: the downfall of Lehman Brothers stock market loses 30%
 25 September 2008: NL opportunistically takes over the Dutch part of Fortis-ABN (‘Revenge of the Dutch’)
 5 October 2008: BNPP buys Fortis and Belgian takes 20% of BNPP (share price at EUR 35)
 10 May 2010: The ECB buys Greek debt on the 2nd market for the first time (European Financial Stability Facility)
 14 November 2008: Europe enters into recession
 9 March 2009: lowest stock market in 10 years (S&P was 676pts and now ~1400pts)
 5 November 2009: Greek crisis. New government announces the lies of the previous government
 April 2010: rates rise to 12% and GR receives EUR 110 billion from EU
 21 November 2010: Ireland asks for help (85 billion)
 6 April 2011: Portugal asks for help (78 billion)
 25 June 2012: Spain asks for help (more than 100 billion)

5. 4
Size of the shipping loan market

6. 5
Average margins vs CDS spread

7. 6
Margin Euronav loans
4.00 %
3.60 %
3.20 %
2.80 %
2.40 %
2.00 %
1.60 %
1.20 %
0.80 %
0.40 %
0.00 %
Margin % evolution on loan facilities
2005/q1 2005/q1 2008/q3 2008/q3 2010/q1 2012/q1 2013/q1 2013/q2 2014/q1
Margin

8. 7
Leverage (loan to value)
100.00 %
90.00 %
80.00 %
70.00 %
60.00 %
50.00 %
40.00 %
LTV - Loan to Value
2005/q1 2005/q1 2008/q2 2008/q3 2008/q3 2008/q3 2009/q2 2012/q2 2012/q1 2013/q1 2013/q2 2014/q1 2014/q4
LTV

9. Maersk Acquisition 5 January 2014

10. 9
Major Acquisition 5 January 2014
 Acquisition of 15 VLCCs (Very Large Crude Carriers)
 Total acquisition price: USD 980 million
 USD 500 million bank debt
• Secured
• Leverage: 50%
• 6-year maturity
• Margin 2.75%
 USD 235 million bond
• Fixed rate 5.95%
• 7-year maturity
 USD 350 million equity
• Private placement
 FINANCING

11. Acquisition 4 additional VLCC vessels from Maersk

12. 11
Acquisition four additional VLCC vessels from Maersk
 4 additional Japanese built VLCCs
 Total acquisition price: USD 342 million
 USD 215 million bank debt
• Leverage: 60%
• 7-year maturity
• Margin 2.25%
 USD 125 million equity
• Accelerated book building
 FINANCING

13. Innovative ways to raise capital

14. 13
Innovative ways to raise capital
 Equity
 PCP’s
 Convertible bonds
 Mezzanine-financing
 Baby bonds (unrated)
 High yield unsecured bonds (rated)
 Bank financing