Chinese Ship Leasing
The leasing arms of the Chinese banks as ship financiers: the sale-and-leaseback model, the principal lessors, the advance rates and the counterparties.
Chinese ship leasing describes the ship-finance business written by the leasing subsidiaries of Chinese banks and financial institutions, among them ICBC Leasing, Bank of Communications Leasing, CMB Financial Leasing and China Development Bank Leasing, which entered international shipping in volume during the 2010s.
The characteristic product is a sale and leaseback : the lessor buys the ship and charters it back to the operator on a long bareboat charter party with a purchase option or obligation at the end. Because the lessor takes title rather than a mortgage, it can lend at higher advance rates than a commercial bank secured by a charge, which is the structural reason the houses won share as European bank balance sheets contracted.
The full article will cover the principal lessors and their fleets, the standard structure and its documentation, the pricing basis and typical advance rates, the sectors where the model concentrated, the interaction with Chinese shipyard newbuilding programmes, and the sanctions and counterparty questions the structure has raised.