ICM303-Shipping Finance and Investment

Module Provider: ICMA Centre
Number of credits: 30 [15 ECTS credits]
Level:7
Terms in which taught: Spring term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2020/1

Email: i.alexopoulos@reading.ac.uk

Type of module:

Summary module description:

Shipping Finance and Investment focuses on the evaluation and selection of alternative shipping related investment decisions under uncertainty and the different sources of financing available to shipping organizations. The module deals with the process and types of traditional bank financing, as well as alternative sources, such as public equity and bond issuance, private equity and ship leasing, among others. It also provides a rigorous grounding on the long-term investment decisions that shipping businesses make to grow organically or through acquisitions, the valuation tools and analysis used to make these decisions and the factors that affect them.

Aims:

Assessable learning outcomes:

By the end of the module, it is expected that the students will be able to:

• Understand the principles and trends pertaining the governance of shipping organisations


• Appreciate and evaluate the shipping finance sector, in terms of markets, participants, sources of finance, current trends and future challenges


• Use contemporary tools to conduct financial analysis for investment purposes in the shipping industry


• A ppraise and select among alternative investment plans in shipping


• Understand the process associated with issuing shipping bank loans and the associated credit analysis


• Analyse the framework related to equity and/or debt issuance in public/private capital markets by shipping companies and the factors that affect these decisions


• Propose a financing strategy, through a case-study, for a shipping company


• Estimate the cost of capital and assess the capital structure of a shipping company


• Apply key valuation methods to value shipping organisations


• Appreciate the efficacy of growing through mergers and acquisitions in the shipping industry, the motives and process involved

Additional outcomes:

The student will develop familiarity with sources of shipping finance, and related market data, and gain experience in analyzing the data in ways closely related to shipping market practice. The student will learn to relate corporate data and news to financial management decisions within shipping organizations. The seminars will provide students with the opportunity to propose financing and investment strategies for shipping companies.

Outline content:

• The Global Debt Ship-Financing IndustryÌý


• Bank Credit Policy and Credit AnalysisÌý


• Bank Loan Legal Considerations, WorkoutsÌý


• Examples of Second Hand and Newbuilding Ship FinanceÌý


• Asian Ship Finance and Export Credit AgenciesÌý


• Private and Public Equity Markets and Shipping IndustryÌý


• High Yield Bond Markets and Mezzanine FinanceÌý


• Ship Lea sing Structures, KG - KS and Islamic FinanceÌý


• Capital Budgeting & Investment AppraisalÌý


• Cost of Capital and Capital Structure in ShippingÌý


• Valuing Shipping Companies


• Mergers and Acquisitions in Shipping

Brief description of teaching and learning methods:

Lectures will be used for the exposition of theory. Classes will be used to discuss non-assessed problem sets and case studies. The techniques used to achieve the stated module objectives will consist of a combination of active teaching, question-answer sessions, class examinations, assignments and class discussions.

Summative assessment- Examinations:

Summative assessment- Coursework and in-class tests:

Individual assignment based on a licensed case study. 3,000 words maximum. Assignment is given at the start of the term and its deadline is near the end of the term.

The in-class mid-term test takes place in the middle of the term and its duration is 1.5 hours long. It involves short essay questions and problems to be solved.

Formative assessment methods:

Penalties for late submission:
Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information: http://www.reading.ac.uk/internal/exams/student/exa-guidePG.aspx

Assessment requirements for a pass:

A minimum total final mark of 50%.

Reassessment arrangements:

Reassessment by assignmentÌý

Additional Costs (specified where applicable):
1) Required text books:
2) Specialist equipment or materials:
3) Specialist clothing, footwear or headgear:
4) Printing and binding:
5) Computers and devices with a particular specification:
6) Travel, accommodation and subsistence:

Last updated: 4 April 2020