Shipping and aviation finance

This structure suits owners and operators acquiring, refinancing or releasing equity from vessels and aircraft, including dry bulk, tanker, container and specialist shipping, as well as commercial and cargo aircraft and engines. It is used both by established fleet operators and by newer entrants supported by a strong charter or lease counterparty.

It is also relevant to leasing companies and investors seeking sale and leaseback transactions, where an operator releases capital from an owned asset while retaining its use under a lease, improving liquidity without disrupting operations.

Debt is secured by a first mortgage over the vessel or aircraft, registered with the relevant flag state or aviation authority, together with an assignment of charter or lease income, insurances and, frequently, earnings and requisition compensation. Facilities amortise over the loan term with repayment profiles matched to the expected remaining useful economic life of the asset.

Sale and leaseback structures involve the operator selling the asset to a lessor and leasing it back under an operating or finance lease, converting a capital asset into a fixed periodic payment and releasing the sale proceeds for other business use.

Underwriting weighs the asset's age, specification and residual value against class society or manufacturer maintenance standards, alongside the creditworthiness of the charterer or lessee and the length and terms of any employment contract. Technical management quality — the operator's track record on maintenance, safety and compliance — is assessed as closely as the balance sheet.

Flag state, classification society and jurisdiction of registration all affect financeability; assets under widely recognised registries and class societies are more readily financed than those in less familiar jurisdictions, all else being equal.

Pricing typically ranges from 5–9 per cent over base rate for modern, well-employed tonnage or aircraft with strong lessee credit, rising for older assets, shorter charters or less established operators. Loan-to-value is generally 50–70 per cent of appraised or market value, lower for older or less liquid asset types.

Costs are driven by asset age, remaining economic life, employment certainty and counterparty credit. Newer assets on long-term charter to investment-grade counterparties command the tightest pricing and highest leverage.

GFG reviews the asset, its employment and the sponsor's financial position, then approaches specialist shipping or aviation lenders and lessors with a mandate for the relevant asset class and jurisdiction.

Refinancing of an operating asset with existing employment can complete in six to ten weeks; new acquisition financing, particularly involving newbuild delivery or novel jurisdictions, typically takes longer to accommodate flag, registration and insurance requirements.