Private-equity funds snap up shipping debt
US$5b moved last year; firms may end up owning vessels
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[NEW YORK] Private-equity and hedge funds are accumulating shipping debt at the fastest pace since they began buying the risky loans from banks two years ago, raising prospects of the firms eventually owning the vessels.
About US$5 billion in shipping loans has changed hands in the past year, estimates AMA Capital Partners, a fund manager and adviser in New York. Investor demand is driving prices as high as 90 cents on the dollar, from 70 to 80 cents a year ago, according to Hartland Shipping Services, a London-based shipbroking and consulting company that split off from HSBC Holdings in 2012.
The influx illustrates a broader shift as investors load up on debt being abandoned by banks amid regulations intended to prevent future taxpayer bailouts.
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