Corporate Finance & Capital Markets
Capital Structure of Shipping Companies
Summary
Capital structure describes the mix of equity, secured debt, leases and other claims financing a shipping business.
Why this matters in ship finance
High operating leverage and volatile vessel collateral values make leverage policy central to solvency, refinancing flexibility and shareholder returns.
The concept
A shipping group may finance each single-ship special purpose vehicle (SPV) separately or use group facilities. Economic debt can differ from the debt recognised in headline ratios because leases, guarantees and restricted cash matter.
How it is used in practice
Calculate net debt, lease-adjusted leverage, maturity ladders, debt-service cover and collateral headroom across a freight-cycle downside case. Separate parent and SPV recourse.
Practical issues
There is no EU-prescribed optimal debt/equity ratio. Accounting classifications and lender capital rules must not be presented as borrower leverage limits.
How ShipFinance.ai uses this concept
Map facilities, recourse, leases and equity to a common fleet-level capital stack, then test downside debt capacity.
Key takeaways
- Combine debt, leases and guarantees when measuring leverage.
- Stress repayment against freight and asset-price cycles.
- Map recourse and restricted cash by legal entity.