Comments on: The shipping industry’s $350 billion debt

By: dsquared

dsquared — Fri, 13 Nov 2009 07:56:51 +0000

[So far, the shippers have been making their interest payments, which has helped the banks to avoid writing down the loans]

errr yes, it does help you avoid writing down a loan if it is *current* and *performing*.

By: Ken Houghton

Ken Houghton — Thu, 12 Nov 2009 23:26:42 +0000

12 ships not worth $77MM == $6.4MM per ship

Data point from 17 months ago: 5-yr-old ship worth $88MM

Lead time for building a ship is on a scale similar to lead time for turning a ship–in short, everything made in the interim was well-known and anticipated in June 2008.

Clear conclusion 1: Shipbuilders should be shorted; the product they are producing will be difficult to sell for a profit, or even at its marginal cost.

Clear conclusion 2: The Eastwind ships are much more than five years old, and probably weren’t worth much more than the cost of the loan then.

By: Uncle Billy Cunctator

Uncle Billy Cunctator — Thu, 12 Nov 2009 19:18:57 +0000

” It’s not a pretty picture for anybody concerned.”

Except for the folks that made some commish on the loans.

By: Robert

Robert — Thu, 12 Nov 2009 19:00:22 +0000

Any idea how long these ships have been in service? $88 million still seems high for a ship!

By: Jim Caserta

Jim Caserta — Thu, 12 Nov 2009 18:11:01 +0000

“worthless given the glut of new ships” and dramatic decrease in trade due to the global recession. Long term higher oil prices will also make long-range shipping less attractive.