ABSTRACT
Shipping is one of the world's most capital intensive industries. Container ships and tankers can cost up to $125 million each, about the same as a Jumbo Jet. LNG tankers, the most expensive ships, cost $250 million each. The tankers carrying the oil imported by the United States alone have a replacement cost of $150 billion. In the early 1990s the bulk shipping industry invested about $20 billion each year on new and second-hand ships.! Capital payments dominate shipping companies' cashflow and decisions about financial strategy are among the most important that their executives have to make. For this reason alone ship finance deserves a special place in the study of shipping economics.
