maritime, rigs & ship financing
BancCorp’s method of “hands-on” service has enabled its Clients to grow competitive in an increasingly competitive global marketplace.
Many of its Clients started as small shipping companies or marine service companies and now maintain an expanding fleet.
BancCorp was one of the first to formulate and structure “Asset Backed Securitization” for the marine industry.
This structure has enabled its Clients to expand their fleet faster than their competition, and maintain financing costs less than traditional financing.
US CROSS BORDER LEASING
The following lease/financing structures are offered to meet the capital requirements of domestic and international Clients to take advantage of favourable tax laws and interest rates through borrowing in markets within and outside the United States. BancCorp has facilitated U.S. Tax-Based Cross-Border Leasing for aircraft and now Marine Vessels. Until recently, marine vessels have not been favoured assets due to depreciation period for vessels and the “Pickle-Dole” rule. But BancCorp has created new Lease structures, which favour both, the Investor and the ship owner.
Lease offerings cover a broad range of Shipping Assets including tankers, Ro-Ro vessels, container vessels, bulk carriers and other shipping related equipment under a variety of leasing options. Some of the options available through BancCorp are:
Operating Leases
Leases with residual positions ranging from 15% to 40% of the cost of the vessels financed, allowing off-balance sheet treatment by the lessee and tax depreciation by the lessor in most tax jurisdictions.
Finance Leases
Leases with zero or nominal residual positions to the Lessee. Finance Leases are also referred to as Nominal Leases and are usually treated as financing or loans for tax and book purposes.
Synthetic Leases
Full pay-out leases which allow the Lessee off balance sheet treatment for financial reporting (book) purposes, but are considered purchases for tax purposes, thus allowing the Lessee to depreciate the asset and write off the related interest expense. Synthetic leases are offered under cross-border arrangements which, due to the Lessor’s domestic tax treatment (such as special capital allowances and low tax rates), can carry very attractive lease rates to the client.
Double Dip Leases
Cross-border lease structures (including those referenced above) which, due to the nature of the tax laws in the Lessor’s and Lessee’s respective jurisdictions, enables both the Lessor and Lessee to claim depreciation (capital allowances) on the asset for tax purposes. The Lessor typically passes on part of its advantage in the form of a lower interest rate and the Lessee enjoys the tax sheltering effect of the depreciation.
Lease Tenors
The above lease products can be structures can be offered with monthly, quarterly, semi-annual, or annual payments over 5 to 15 year terms, depending upon the specific assets leased and the credit quality of the Lessee.
