The entry of Private Equity into Shipping a Lender s perspective. Energy, Commodities and Transportation October 2013

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1 The entry of Private Equity into Shipping a Lender s perspective Energy, Commodities and Transportation October 2013

2 ABN AMRO at a glance A leading Dutch bank with the majority of revenues generated by interest income and fees & commissions Clearly defined business model Strong position in the Netherlands International growth areas in Private Banking, asset-based financing (Leasing & Factoring), ECT and ABN AMRO Clearing 1 Moderate risk profile Enhanced risk management & control framework Diversified loan book Primarily client-related trading and investment banking activities Execution excellence with strong focus on improving service to customer, lowering cost base and achieving integration synergies Note(s): 1. ECT: Energy, Commodities & Transportation; Clearing refers to the clearing activities of the bank and its subsidiaries; TOPS: Technology, Operations and Property Services; ICC: Integration, Communication and Compliance 2. Source: based on Scorpio Private Banking Benchmark report

3 Energy, Commodities & Transportation ECT offers high quality financial services to international companies that are active in the value chain of the ECT industries Key success factors Global client network Long track record In-debt industry knowledge & research Risk & portfolio management Expertise in Documentary Credits and Credit & Collateral Management 340 professionals with long term ECT industry expertise Energy Oil & Gas Oilfield Services Drilling FPSOs 1) Infrastructure Commodities Agri: Cotton, Cocoa & Coffee, Sugar, Grains Metals: Steel, ores and base metals Energy: Crude oil, LPG, refined products Transportation Deep sea shipping industry Containers Dry bulk Crude, Product & Chemical, Gas Intermodal / Containers Principal Finance ECT co-investment activities Portfolio of assets (ships, containers) with companies / clients active in ECT sectors International presence Awards & rankings 1) Floating Production Storage & Offloading (platforms) Americas New York Sao Paulo EMEA Amsterdam Athens Dubai London Oslo Rotterdam Asia Hong Kong Shanghai (in set up) Singapore Best Commodity Trade Finance Bank in Asia-Pacific 2012 (Trade Finance Magazine) Best Bank for Structured trade and Commodity finance 2012 (Trade & Forfaiting Review) Top 3 position in the Offshore Services Bookrunner League Table 2011 (Dealogic) Top 3 global position in Floating Production Storage and Offloading systems Top 3 position worldwide as commodity bank Top 5 position in shipping syndicated loan markets 3

4 Private Equity in Shipping Private equity Increasing presence within the Shipping Industry PE investment opportunities: Tight credit markets Historically low vessel values Cyclical business In 2011 and 2012, PE funds closed around 22 shipping transactions, aggregate deal size of over USD 6.4 bn (source: Marine Money) Investor interest broadly spans Traditional PE; Distressed; Banks; Structured equity; 4

5 Private Equity in Shipping Private equity New building programs As the market is considered to be close to the bottom of its business cycle, we have seen increased ordering by shipping companies funded by financial investors Ordering new ships at relatively low new building prices (also compared to second hand values), usually with modern ecodesign specs Increased demand for ships poses a potential threat to recovery for the industry and potentially creates a two tier market: one for the new generation fuel efficient ships and one for existing tonnage 5

6 Private Equity and ABN AMRO BANK NV Private equity Lender perspective Financial investors have always been active in the shipping industry, although the scale at which financial investors are now participating in the industry has changed As a lender, we take a long term view on the market and the relationship with our clients Accordingly, the focus of ABN AMRO with regards to deals where PE firms are involved lies on: Cooperation with strategic investor Venture is managed by an experienced management team with a proven track record Reputable and experienced ship owner Modern and attractive assets Acceptable risk profile, i.e. strong deal structure 6