German company TUI Cruises has secured a €360mn 12-year post-delivery buyer credit facility to purchase a cruise ship from STX Finland.

The loan is to be arranged by Citibank with financing also coming from Finnish Export Credit, a subsidiary of Finnvera, which will guarantee 95% of the credit. It’s the second such deal to be guaranteed by Finnvera in the past year. The Finnish ECA previously guaranteed a loan – also of €360mn, but partly financed by BNP Paribas – for the Mein Schiff 3, which will be delivered to TUI Cruises in 2014.

The new arrangement will see a sister ship delivered in May 2015, at which point the 12-year loan will be activated. The pricing of both loans is confidential.

One third of Finnvera’s business is now in the shipping finance sector, executive vice-president Topi Vesteri confirms to GTR, and the TUI deals also highlight its growing business in the OECD. “The trend is that we see more and more deals in the industrial countries,” he says.

“The cruise ships are such large transactions so whatever the market, banks want an ECA involved. But transaction size is driving the demand in the OECD. Traditionally it was political risks that drove the demand. Nowadays, we’re seeing a lot more new business in the southern part of Europe, Russia, the US, Brazil, and the driver is transaction size and the economic situations in some of the countries.”

Vesteri tells GTR that banks are nowadays more reluctant to commit to a 12-year loan without an ECA because of the incoming Basel III capital holding requirements. “Banks are reluctant to give these long-dated funding commitments. It’s not to do with the risk of the buyer or the obligor; it’s to do with the conservative approach the banks are taking to funding.”

It’s estimated that the construction of the sister ships in STX Finland’s Turku shipyard will lead to the creation of 5,500 person years of employment.