Daily operating costs include the cost of Crew, Spare Parts, Insurance. The expenses of Drydocking and Special Survey are also operating costs. Always remember to check if daily operating expense quoted is including provision for DD/SS.
For financial analysis and modelling of ship investments, the cost of off-hire should also take into account.
For ships on time-charter, the charterer pays … Read the rest
Monte Carlo simulation is a computerized mathematical technique used to analyze risk. Monte Carlo simulation performs risk analysis by building computer models of possible results by substituting a range of values—a probability distribution—for any factor that has uncertainty. It then calculates results over and over, each time using a diﬀerent set of random values from the speciﬁed probability function for … Read the rest
Trade Out Rate to Scrap Value is the Bareboat Rate (Debt Service) per Day required to pay the remaining debt balance down to estimated scrap value over the remaining economic life of the ship. Trade Out Rate to Zero is the Bareboat Rate (Debt Service) per Day required to pay off all the remaining debt balance over the remaining economic … Read the rest
The ratio of EBITDA divided by Debt Service
Debt Service Break-Even is calculated by taking the debt service per day and adding the OPEX per day, including provisions for periodical dry docking (DD)/special survey (SS). If the debt service per day is USD6,780, the OPEX (excluding drydocking) is USD5,800 per day, and the estimated cost of the next drydocking is USD250,000 with 887 earnings days (30 months adjusted … Read the rest
Debt Service Per Day is calculated by taking the total debt service during a period and dividing it by the number of days in the period but adjusted for oﬀ-hire. For example, if the debt service (scheduled loan repayments plus interest payments) for a period is USD1.2 million over 182 days and the expected oﬀ-hire in the same period is … Read the rest
Interest Cover Ratio is calculated by dividing the total cash ﬂow available to service debt during a speciﬁc period and dividing it by the interest payment for the same period. Where interest is not being paid, the lending bank will have to account for the loan as being non-performing and make necessary loss provisions in its accounts. The bank may, … Read the rest
This ratio is calculated by taking the total cash ﬂow available to service debt during a speciﬁed period and dividing it by the total amount of debt repayment plus interest payment for the same period. The period chosen is normally that from one debt repayment date to the next (typically, six months).
This ﬁgure shows the minimum market value the ship can have before a loan is in breach of its minimum value covenant. It is calculated by taking the outstanding loan balance and multiplying it by the LTV ratio. For example, if the loan balance is USD10 million and the LTV covenant is 130%, the required minimum value will be USD13 … Read the rest
London Interbank Offered Rate (LIBOR)