Investment Opportunities

Here at St Julian's Maritime Finance, we as a yacht leasing company are constantly and actively seeking to work with professional investors/debt providers who are willing to fund our leasing contracts by providing asset-backed commercial loans (facilities) against lucrative interest rates.

OUR DEBT PROPOSAL

Facility Requested

Debt Funding of €5m- €15m:

Providing loans for financing operating yacht leases (asset backed finance),
Tenors between 36 to 60 months
Drawdown under the facility per yacht financed,
Monthly / quarterly interest and capital repayments
Interest rate to be advised

Asset Financed

Loan to Value

Lease Clients / Guarantor

Security / Collateral

New to max 3-year-old luxury yachts built by reputable shipbuilders, including Sunseeker, San Lorenzo, Ferretti, Fairline, Sunreef etc.

Purchase values €1m to €5m
Yacht registered under Maltese flag

Maximum 60 % LTV

European high net worth Individuals (HNWI),
Net-worth minimum 5 x amount financed.

Each leased yacht is registered in a specific “ringfenced” SPV,
First mortgage over fully owned yacht,
Personal guarantee from UBO, HNWI
Corporate guarantee provided by St Julian’s Maritime Finance Ltd (STJM) to the debt provider,
Remarketing agreement with the supplier/agent.

Borrower / Lessor

Each leased yacht is registered in a specific “ringfenced” SPV,
First mortgage over fully owned yacht,
Personal guarantee from UBO, HNWI
Corporate guarantee provided by St Julian’s Maritime Finance Ltd (STJM) to the debt provider,
Remarketing agreement with the supplier/agent.

Management Team

Leasing professionals (former ING Bankers) with over 50 years of (yacht-) leasing experience.

SECURITISED YACHT

Yacht Financed

LTV

Registration

Ownership

Remarketing

Mortgage Debt

Both motor and sailing yachts
Yacht values are confirmed by an independent Malta Transport approved valuator

Conservative 60 % loan to value, decreasing to 20% at end of lease (see chart below)
Loan repayment at a higher rate than the devaluation of the market value of the asset

Registered under Maltese flag,
Dedicated tracker system has been built in.

Fully owned by the lessor (a SPV of STJM Finance), allowing full legal control including repossession resulting in maximum loan recovery.

Remarketing agreement in place with the producer and the agent of the yacht, realising the real market sales value in case of a repossession.

The debt provider receives a full first mortgage on the yacht

The above chart shows that the estimated market value of the yacht is at all times higher than the outstanding debt, even under distressed market conditions.

The loan to value decreases from 60% to 20% over the 5 years leasing.

The following market assumptions are used:

Yachts are expected to be sold for a minimum of 50% of the original purchase price after 5 years.
New vessels are assumed to lose 20% of the value at delivery.
The yacht purchase is financed as follows:

- 40% by a down payment / loan from the HNWI and STJM Finance

- 60% from external debt providers, with a 10% bullet payment at lease maturity

Learn more. Get in touch today.

LEASE / CLIENT / GUARANTOR

Lease Clients

UBO Guarantor

End of Lease

European HNWI.
Maximum financed 20% of total net worth

The UBO, a HNWI, is guarantor of the transaction

Lessee has the obligation to repay the remaining loan and to purchase the company/SPV that owns the yacht at the end of the lease

LOAN RISK & MITIGANTS

Primary

Operating Lease of the fully owned luxurious yacht with a maximum LTV 60%;
Lessee/client a European HNWI of which the lease financed amount is capped to 20% of his net wealth, resulting in a low probability of default (PD).
No residual Value risk at end-of lease as the SPV will be sold at the end of lease by utilising the put-option of the shares to the lessee.

Secondary

Mortgage of the fully owned yacht.
Personal guarantee from the Lessee/UBO.
Corporate guarantee from St. Julian’s Maritime Finance (the 100% owner of the Lessor/SPV).

Market Risk

Leasing (of yachts) is characterised by one of the lowest actual market default risks, even during the 2008 financial markets downturn the values of our targeted luxurious the yachts did not drop below our proposed maximum LTV rates.
The low market risk is supported by a recent market analysis of the Federation of European Leasing companies (available on request).

Operational Risk

The operating lease/SPV is managed by a very experienced leasing team of St. Julian’s Maritime Finance Ltd. (“STJM”), the company is well capitalised and is also guaranteeing the Credit Risk to the Debt provider.
The operational risks of the yacht is at all times with the lessee, this includes maintenance & repair, crewing, etc.
STJM is responsible that the yacht will be fully insured (for theft, damages, third party liability, etc) at all times. The debt provider will be included as loss payee.

Asset Liquidation Risk

The asset is registered under Maltese Flag and fully owned by the lessor and can always be traced trough it’s built in tracker system.
Under Maltese law the repossession of the yacht is a straightforward easy and quick process and no court proceedings are required.
At commencement of the lease a “re-marketing agreement” has been signed with the producer / agent-seller of the yacht, the agent will be marketed as regular second-hand yacht and will assure that the yacht will be sold at market value.

Structural / Reputation Risk

The Operating lease is booked in a dedicated “ringfenced” SPV for the Leased yacht.
The debt is drawn to the SPV directly (drawn under the facility) per lease transaction and debt repayments are fully matched with the operating lease rentals.
All legal documentation is drafted by reputable Law firms.
STJM is in the process of receiving the non-banking financial institution licence and will be regulated by the Maltese Regulator (MFSA).
Strict compliance and onboarding regime, supported by international well-known compliance specialist “ARQ Group”.