Corporate Finance & Capital Markets
Treasury Management in Shipping Groups
Summary
Treasury manages funding, interest-rate risk, foreign-exchange exposure, deposits and cash movement across shipping entities.
Why this matters in ship finance
USD-denominated freight receipts and debt can coexist with expenses and taxes in other currencies, producing genuine liquidity mismatches.
The concept
Centralised treasury may use loans, netting and derivatives, but related-party balances, bank security and hedge accounting each require separate treatment.
How it is used in practice
Inventory currency exposures, hedge timing, counterparty limits and available collateral, then stress adverse interest-rate and currency movements.
Practical issues
Hedging accounting designation under IFRS 9 is not a legal prerequisite to using a hedge, and economic effectiveness differs from accounting effectiveness.
How ShipFinance.ai uses this concept
Generate cash-flow-at-risk, maturity and counterparty concentration views for the treasury function.
Key takeaways
- Hedge exposures by currency, maturity and counterparty.
- Economic hedging and IFRS hedge accounting differ.
- Monitor margin calls and liquidity effects.