With US interest rates still at rock-bottom levels, investors are moving quickly to acquire and finance port assets prior to any rate rises, according to Drewry Maritime Advisors.
As the Federal Reserve reduces its bond purchases – which were increased during the last recession to revive the US economy – the rate is expected to rise from its historic 0.25% low, reported JOC.com.
This will drive more investors to secure financing at the lowest possible rates before borrowing costs start to increase. For the same reasons, port operating companies will try to refinance outstanding loans.
Drewry also said that much of the acquisition activity has been in the US, where several transactions involving US terminals have taken place in 2014.
One of these was MOL which sold a 49% stake in its TraPac unit’s Los Angeles and Oakland terminals to Brookfield Asset Management earlier this year. Brookfield later acquired half of APM Terminals’ New York-New Jersey terminal.
Also this year, Goldman Sachs sold its 49% stake in SSA Marine to Mexican entrepreneur Fernando Chico Pardo; APM Terminals sold its Portsmouth, Virginia, terminal to two UK-based investment funds, and ‘K’ Line sold to Ports America a 30% stake in its ITS terminal at Long Beach.
It has also been reported that Deutsche Bank is seeking a buyer for all or part of Maher Terminals, which operates terminals in New York/New Jersey and Vancouver, Canada.