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Monaco Yatch Show

FINANCING MEGA-YACHTS: A SUCCESSFUL TAILOR MADE OFFERING

For the seventh consecutive year Societe Generale Private Banking will take part in the Monaco Yacht Show (MYS) (booth n° QD16), which takes place from 25 to 27 September 2013. The Monaco Yacht Show is one of the world’s most prestigious events in super yachting, a sector in which Societe Generale Private Banking Monaco has specialised. Chrystelle Cavernes, in charge of our Mega-Yacht finance offering, and her associate Anthony Buneta answer our questions.


WHAT IS THE IMPACT OF SUCH AN EVENT FOR THE PRIVATE BANK?

Chrystelle Cavernes: The MYS is one of the world’s most prestigious events in super yachting, if not the most prestigious. While the fallout is positive it is difficult to measure exactly. As one of the main players in the mega-yacht financing market, it is very important for Societe Generale Private Banking to take part in this local event with a global reach. We will have a larger booth this year to greet clients, prospective clients and industry professionals.

IN 2010 SOCIETE GENERALE PRIVATE BANKING LAUNCHED A FINANCING OFFERING DEDICATED TO MEGA-YACHTS, CAN YOU TELL US ABOUT IT?

C.C.: Indeed, for more than two years now we have had an offering dedicated to the financing of new building or second hand mega-yachts of over 40 metres. Because of the type of assets financed combined with a high-end demand from our clients, these loans which are repayable in instalments must be flexible. They are set up in dollars or euros, with a fixed or floating rate, with or without a balloon repayment1 and over 3 to 7 years. We finance both new buildings during the construction period (we have a direct relationship with the shipyard) and second hand ships (15 years maximum). A multilingual team is available locally to answer all requests. Furthermore, we also work with industry specialists such as specialised lawyers, experts, brokers or insurers to assist our clients in the best possible way and set up these loans within a meticulously prepared framework.

Anthony Buneta: So far we have financed mega-yachts of 55 to 85 metres for an average term of approximately 5 years. Once the client has signed a term sheet², the average time required to process a financing file is between one month and one month and a half.
Our sole mission is to evaluate as best as possible the needs of the buyers of these luxury assets to be able to offer a high-end service and solutions adapted to this very specific market.

WHY IS THIS OFFERING ONLY GEARED TOWARDS MEGA-YACHTS OF MORE THAN 40 METRES AND HOW WOULD YOU DESCRIBE THE CURRENT STATE OF THE FINANCING MARKET IN THIS SPECIFIC SECTOR?

C.C.: After the crisis of 2008 we noticed that the sector of average to large yachts, up to 40 metres, had been hit very hard. However, the continued growth of orders for mega-yachts, ever-increasing sizes and a search for authenticity, all justified our positioning. Furthermore, the mega-yacht sector, ships of more than 70 metres, seems particularly strong, with 51 units being built at August 2013 and deliveries extending until 2017.

A.B.: The mega-yacht financing market has very few players in Europe and demand remains strong. In general, buyers want to leverage these assets whose prices reach several tens of millions of euros. With the continued growth in mega-yacht orders, the best shipyards are now facing increased competition. However their know-how, combined with the quality of the ships they build, allow them to keep a substantial competitive edge.


If you are looking for a financing for a mega-yacht we will be very pleased to greet you on our booth n°QD16 at the Monaco Yacht Show from 25 to 27 September 2013.

1 Balloon Payment: Payment at maturity representing the last instalment of the loan, which is higher than the previous instalments.
² Term Sheet: Short document summarising the main financial terms and securities of the financing.

In Brief

> Financing of new or second hand mega-yachts (<15 years)
> Pre- or post-building financing in EUR or USD
> Loans repayable in instalments with the possibility of a balloon payment, at fixed or variable rates
> 3 to 7 year financings (including building period)
> Specialised multilingual team to support and advise all through the transaction
> Close cooperation with the best professionals in the industry