Project Evaluation:
Case Studies and
Systems
Marsoft has unique
experience, skills, and data
on the shipping markets and
the drivers of project
performance.
We work closely with
our clients to apply that
expertise to specific
shipping projects.
Our project
evaluations typically cover
the profitability and risk
factors of a specific
investment, as well as the
competitive structure of the
market being considered and
how those factors may change
over time.
Our evaluation
provides a senior management
focus on a project’s
financial performance and
are often used to justify a
project in board-level
presentations.
In some cases our clients
need to evaluate very many
projects in a standard
format.
A bank building a
portfolio of business is one
example of that need.
In those cases
Marsoft can provide a
project evaluation system to
automate the business of
developing an historical
database, current valuation,
and assessment of future
developments.
Marsoft is a trusted advisor
to investors, charterers,
and banks.
Our role reflects
several factors:
-
Marsoft’s reputation
is widely recognized in
the shipping business.
Our analysis and
conclusions are well
supported and credible
to key players.
-
We provide an
objective and timely
assessment of project
performance – our goal
is to provide the best
possible evaluation of a
project and we are not
beholden to any party to
support a transaction
for its own sake.
-
We
continuously monitor
market conditions
and their consequences
for a project – market
conditions change
rapidly and timely
evaluation is key.
-
We offer a team with
exceptional experience
and understanding
of the shipping business
– we understand your
projects and how they
should be evaluated.
-
Our
unique databases
allow Marsoft to quickly
provide essential
information on key
performance indicators.
Our services are tailored to
meet the particular needs of
our clients.
Our project
evaluation and credit rating
systems, for example, are
designed to meet the needs
of owners and financial
institution with large
portfolios and a substantial
deal flow.
They support frequent
and consistent delivery of
standard project evaluation
across a wide range of
projects.
Our project reports are
intended to meet the needs
of projects with unique
attributes or for owners
with relatively few
projects.
We meet those needs
with reports that are
tailored to the specifics of
each project.
The case studies
below illustrate a range of
recent projects.
Case Studies
Marsoft
has provided active support
to our clients on a variety
of consulting assignments
over the past twenty five
years.
Our consultants have
wide-ranging expertise and
experience in working with
senior level decision makers
in supporting commercial
project evaluations.
Some of
our assignments:
Strategic analysis and
advice on the LNG shipping
set-up for the Shtokman gas
field for a large
international energy company
The work
included development and
advice on strategy, market
analysis, investment
structuring, fleet structure
evaluation and optimization.
Strategies for
transportation of heavy
crude oil from
Latin America
to international markets
Evaluation for major
international oil company
with regards to trading
patterns, ship requirements,
fleet optimization and
capital cost structures.
The study also
included an evaluation of
fleet ownership structures
and chartering strategies.
Due Diligence of Panamax and
Post-Panamax newbuilding
investment evaluation
Due
Diligence analysis of the
containership market with
special focus on the fast
expanding Panamax and Post-Panamax
market segments. Scope of
work included a overall
market review focusing on
trade and fleet size
developments, analysis of
3000-4000 TEU size class
including future
opportunities, long-term
risk factors and alternative
developments, and a rate and
residual value overview
based on historical
analysis. The review also
included an assessment of
residual value risk under
various financing and market
scenarios.
Project Evaluation
Systems
Marsoft’s Project Evaluation
Module (PEM) provides a
standardized set of project
evaluation tools for a very
wide range of shipping
investments.
First introduced in
1994, the PEM has been
continuously improved since
then – it is now the “market
standard” for project
evaluation for financial
institutions. It is intended
to support a substantial
deal flow spanning a wide
range of markets.
The PEM offers
several key benefits:
-
The analysis is tailored
to the specifics of each
vessel – its age,
capacity, type,
speed/consumption and
other details are fully
accounted for.
The PEM covers
bulkers, crude tankers,
product tankers,
containerships (up to
12,000 teu), chemical
tankers, and reeferships.
-
It provides standardized
financial performance
evaluation reports,
showing profitability,
residual value risk,
earnings including
charters, and a wide
range of financing
terms.
The performance
reports include both
historical data for each
specific vessel and
forecasts of earnings
and values benchmarked
to market scenarios
constructed by Marsoft
or the client.
-
A database of recent
sale & purchase
transactions is included
to facilitate
comparisons with
publicly reported deals.
-
Vessel and loan
information is stored in
an Access or SQL Server
database for later
retrieval or integration
with other systems (like
Marsoft’s credit rating
or portfolio management
systems – see below).
Banks and shipowners with
large fleets are the primary
users of the PEM.
The value of the
system to them is realized
in the form of time savings
and greater confidence.
Analysts can quickly
manage a large volume of
transactions and credit
committees and/or investment
committees can rely on the
standardized reports from
the “gold standard” project
evaluation system.
See
Project Evaluation System
Validation of Marsoft
valuation methodology:
Marsoft
undertook an exercise to
validate the accuracy of
internal vessel valuations
for a client which allowed
the customer to certify our
valuations for internal use
and resulted in Marsoft
valuations being used as the
baseline in reporting
requirements for an
asset-backed securitization.
For more details,
read the case study:
Case Study - Marsoft
Valuation Methodology
Credit Rating Systems
Marsoft’s Credit Rating
Module (CRM) provides a
customizable set of risk
assessment rating tools for
a very wide range of
shipping loans.
They produce
estimates of the probability
of default, the exposure at
default and loss given
default and other key risk
indicators over the life of
a project.
Marsoft’s credit
rating systems were first
introduced in 2003, and have
been extended and enhanced
over time ads regulatory
practice and business
conditions have changed.
The
shipping business is highly
competitive, and very
volatile in the short-term,
but relies on long-lived
assets that may trade
through several market
cycles.
Marsoft’s credit
rating model captures these
aspects of the business as
well as the presence of
third party credit
enhancements.
It focuses on the
following critical risk
factors:
-
The possibility that a
vessel (or fleet of
vessels) will not be
able to earn enough in
the market to service
their loans.
-
The consequences for
vessel values in
absolute terms and
relative to the debt
outstanding of
defaulting in adverse
market conditions.
-
The structure of the
credit (i.e. the terms
and covenants of a
shipping loan) relative
to anticipated market
conditions, vessel
performance, and other
factors.
-
The availability of
third parties
(charterers or
guarantors) to support a
credit.
Marsoft’s credit rating
models are used by leading
shipping banks and can be
implemented quickly.
They provide a fast
and cost-effective approach
to implementing Basel-II
compliant rating systems
that reflect the specific
character of the shipping
business and data for that
business.
They are integrated
with Marsoft’s project
evaluation and portfolio
management systems to
provide a comprehensive
solution to a bank’s
business development,
monitoring, and reporting
requirements.
See
Marsoft Credit Rating Model
for a more detailed
description of Marsoft’s
credit rating models.
