Alpha AssetsMarine Money Asia Week 2016

Monique Sinmao

Alternative Finance Solutions: the Evolution of Ship Finance

The Ship Financing Lendscape: where we are today2015 Top 10 Ship Financiers1:

1. DNB2. ICBC3. Jefferies4. Morgan Stanley5. Clarksons Platou6. Citigroup7. Borealis8. Sumitomo Mitsui Bank. Corp.9. Commerzbank10. Hamburg Taxpayers (~$7B)

High refi needs, capital crunch, and regulatory shifts boost the need for alternative capital.● Estimated $1.8T of financing is required pre-20252

● Before 2008, banks financed over 80% of shipping deals versus 60% today.● Regulation has driven banks out of ship financing. Banks lack the capital, risk, and cost

structure to participate profitably in direct lending to small and middle market borrowers.

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Sample Bank Portfolios. Source: Petrofin

BDCs

DEDICATED Hedge Funds

Private Equity

InsuranceGovernment

OPPORTUNISTICBanks

COST

FLEX

IBIL

ITY

What does “Alternative Finance” mean?: Historically3

The cost of “borrowing a balance sheet” meant higher rates in exchange for flexibility.

BDCs

DEDICATED Hedge Funds

Specialty Lenders Private Equity

Specialty Funds

Leasing Companies

InsuranceGovernment

OPPORTUNISTICBanks

COST

FLEX

IBIL

ITY

What does “Alternative Finance” mean?: Today4

Growth of dedicated Alternative Finance brings reliable capital and bridges pricing gap.

What does “Alternative Finance” mean?: Today5

The Value of Alternative Financiers

What does “Alternative Finance” mean?: Key Shifts6

Financial Evolutions OUTSIDE of Shipping: FinTech

Personal & SME73%

IB4%

Large Corporate 3%

Asset Mgmt & Wealth

10%

Insurance10%

Capital deployment into Private FinTech companies. Citi Bank Research (2015)3.

• By 2020: 10% of US banking revenue expected to migrate to digital business models in FinTech3

• Commercial Banking is virtually untouched by FinTechnew ventures (75% focused on consumer & small business)

• 3,500 CFAs globally voted the sector to be most disrupted by FinTech will be Asset Management4

• Lending migration to tech reflects empirical experience of banks that the real value is connectivity versus physical presence → in a lower/lesser/longer world, -25% reduction in cost base at banks can produce a whopping +40% increase in pre-tax profits

$1.8B+ in B2B loans since launch in 3Q10

$25mm/month in originations

Current company value $18.5B+

$1.8B+ AUM within 37 months of launch

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Financial Evolutions INSIDE of Shipping: Alpha ShipsDomains of Influence

The Alpha Ships Integrated Platform:

1.Origination2.Pre-Funding3.Asset Mgmt4.Deal Mgmt5.Securitisation6.Secondary Trading

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Critical Industry Advances for next 5yrs of Ship Finance

● Risk pricing correction, Shipping’s Lehman moment: Rating methodology for maritime is overdue for modernization. The highest rating Moody’s assigns to shipping backed portfolios is “low investment grade” (Baa) – largely due to shipping’s volatility5. In any other sector Baa rated bonds command >4.9% rates6. After shipping’s Lehman moment in the past 3 years, it’s tough for lenders to continue justifying sub L+4% rates.

● Adoption of FinTech / Big Data systems: Banks are already using Big Data systems to maintain “live” views on their markets in other sectors, which we anticipate will transfer to shipping. Data and digitalization enables stronger covenant monitoring and more flexible deal structures through increasingly quantifiable risk and confidence on actual market state.

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References1 – The ship finance Top 10 (Dec 2015), Lloyd’s List

2 – Global Real Assets Report (Q4 2015), J.P. Morgan Global & Maritime Transport

3 – Digital Disruption: How FinTech is Forcing Banking to a Tipping Point (March 2016), Citi GPS, Citigroup

4 – Fintech Survey Report (April 2016), CFA Institute

5 – Moody’s Approach to Rating Shipping Loans for Structured Finance Transactions (November 2010), Moody’s

6 – 5-year average of Moody’s Seasoned Baa Corporate Bond Yield

Slide 6 Fintech company stats:• Funding Circle: https://www.fundingcircle.com/uk/• LendingHome: https://www.lendinghome.com/• LUFAX value: http://www.bloomberg.com/news/articles/2016-01-18/lufax-completes-fundraising-valuing-company-at-18-5-billion• WealthFront: https://www.wealthfront.com/two-billion#tax-minimized-account-transfers

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Alpha AssetsMarine Money Asia Week 2016

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A L P H A S H I P S

A subsidiary of Alpha Assets, Inc.

An Introduction to Alpha Ships

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Alpha Ships – the world’s first platform for matching small to medium sized Ship Owners with Maritime InvestorsHow it works…

SHIPOWNERS• 5mins: online application process• <48hrs: indicative terms on funding• 2-3 weeks: full disbursement of

$2-10mm USD against your vessel• 3-5yrs: repayment period

Alpha Ships pre-funds your deal to get you financed rapidly

INVESTORS• Browse our deals and create their

investment portfolio of ships• Track performance of underlying

assets against financial metrics• Platform transparency helps

identify good owners from average owners

• Re-invest in your future vessels

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Who do we finance?

• Small to Medium sized Ship Owners• Vessels in the following spaces:

• Dry Bulk• Product Tankers• Crude Tankers• Chemical Tankers• Containerships

• LTV: 50%-70%• Amount: $2-10mm USD• Term: 3-5 years• Amortisation: flexible• Charter backed: flexible Do you fit these criteria? Then we would

like to discuss financing options with you...

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Borrower Dashboard

Alpha Ships Loan Application 5 minute application followed by a 30 second survey

A comprehensive dashboard to track your loans and applications

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Alpha Assets Management Team

Chief Financial OfficerMonique Sinmao

15+ years as cross-asset Portfolio Manager

specializing in financial institutions, risk mgmt. and credit analysis. Prior firms

include Jefferies Asset Mgmt, Hovde Capital, JP

Morgan and Lehman.

MBA from Georgetown Univ., M.Sc. in Ocean Eng. from MIT, B.Sc. in Naval

Arch. & Marine Eng. from Webb Institute.

Director of Asset Management

Henrik Ness

Managing partner of Njord Shipping AS. Former CEO of

SIVA Shipping and JB Ugland. Previously partner and Board member at RS

Platou Shipbrokers. Strong operational experience in gas, chemicals, product

tankers, dry bulk and crude sectors.

B.S. from Trondheim Business School.

Head of OperationsAshkahn Mokhber

Former Head of Business Development and

Operations for Sohatek, Inc., a local arm of Itochu

Japan. Key member of team that launched

Brazil’s first online funding platform.

B.B.A. in Finance from Loyola Marymount

University.

Strategy ManagerBenjamin Forbes

Previously the Head of North America for

VesselsValue, the world’s leading online platform for

live ship valuations and commercial intelligence.

M.Eng. in Naval Architecture from

University of Southampton and Webb Institute.

CEO / FounderSaravana Sivasankaran

CEO of Siva Shipping, with operating fleet of more than 50 ships. Former

COO of Global Business Group with operations in

real estate and energy infrastructure.

MBA from Harvard Business School. B.Sc. in Electrical and Computer

Engineering from Carnegie Mellon.

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Alpha Assets, Inc. – Contact Info

Address: 1460 BroadwayNew York, New York10036, USA

Phone: +1 646 546 5180

Email: info@alphaassets.com

Website: www.alphaassets.com

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