The Korea Maritime Promotion Corporation recently announced the refinancing of its debt guarantee for the Panstar Miracle cruise ferry, which operates on the Busan-Osaka route, converting it from U.S. dollars to Japanese yen.
According to the corporation, this refinancing has reduced the financing interest rate on approximately 70 billion won by more than 2.5 percentage points. Panstar is expected to save about 1.7 billion won annually, totaling around 7 billion won over four years.
This refinancing reflects Japan's low interest rates and the increased influx of yen funds into the ship financing market. The corporation explained that the active supply of yen funds for ship financing in Japan has created conditions for securing funds at lower costs than in dollars. The corporation redesigned the loan structure to allow for the repayment of yen funds locally, eliminating the need for currency exchange and reducing the risks associated with exchange rate fluctuations and fees.
The Panstar Miracle has received financial support from the corporation from the construction phase through to delivery. In December 2022, the corporation provided a senior dollar debt guarantee for construction funds through a special support program for small and medium-sized shipping companies. It has since supported liquidity by purchasing corporate bonds issued by Panstar and extending maturities annually, with the support amount reaching 750 million won as of September last year.
Kim Sung-jin, head of the ship financing department at the corporation, stated, "Redesigning the currency and conditions to match the operating environment of the shipping company post-delivery is the role of policy finance. We will continue to expand support for small and coastal shipping companies."
* This article has been translated by AI.
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