The superyacht market has experienced dramatic
changes since September 2008. We now have a more purist
construction and sale and purchase market, and one in which cash is
king. It is true that many of the very wealthy have seen their net
worth drop, but of equal importance has been the rapid and severe
constriction of the superyacht finance market. The days of
aggressive lending and pricing have gone.

Having said this, there is still a demand for
finance and banks are still lending – although deals are fewer and
further between. The market has seen high profile casualties
(Kaupthing), those testing the water and withdrawing (RBS, ING) and
those affected by changes in ownership (Fortis).

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Ansbacher continues to lend, but with certain
geographical restrictions on borrowers. Arbuthnot Latham remain
active in the £1 million (€1.08 million) to £10 million bracket.
BNP Paribas Lease Group and Société
Générale are lending, but may require funds under management
and/or cash collateral. UBS, Credit Suisse and Investec may
consider lending to existing customers.

This has left a gap in the market and there is
now significant potential for anyone willing and able to lend. It
is noticeable that banks that have historically lent to the
mid-tier market are now lending against larger yachts. Barclays
Marine Finance and Lombard have both experienced a recent surge in
applications as the market contracts.

What has waned dramatically is the attraction
of the Russian ultra high net worth individual – who will likely
now find it difficult to source yacht finance from the European
market.

The author is a partner at the
UK law firm Hill Dickinson

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