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Private debt

KTB Asset invests $51 mn in Norwegian shipowner Knutsen

It committed around 12.5% of the shipbuilding project, chartered by the Polish government

By Dec 03, 2021 (Gmt+09:00)

LNG carrier of Knutsen
LNG carrier of Knutsen

South Korea’s KTB Asset Management Co. and Hanwha Investment & Securities Co. have jointly invested 60 billion won ($50.7 mililion) in subordinated debt for Knutsen Group, a Norway-headquartered shipowner and the world’s second-largest shuttle tanker operator. The 60 billion won investment was participation in an approximately 500 billion won project fund for the Norwegian company, with a 10-year duration after completion of shipbuilding and a mid-to-late 7% interest rate.

Chartered by the Polish government, the shipbuilding project has lower risk and more stable cash flow than other ship financings, said Jung Woo-song, managing director and head of the global investment banking business at KTB Asset Management.

In the end-2020, Poland’s state-run Polish Oil and Gas Company (PGNiG) chartered two liquefied natural gas carriers from Knutsen to transport US LNG to Poland. The Norwegian company ordered the LNG carriers from Korean shipbuilding giant Hyundai Heavy Industries Co., which started constructing the carriers in August and aims for delivery in 2023. 

KTB Asset Management has 14.4 trillion won in total assets under management. In its 4.5 trillion won allocation for alternative assets: real estate; infrastructure; and ship & airlift account for 59%, 29% and 12%, respectively, according to the asset manager.

It is actively expanding its overseas alternative investment. In November, KTB Asset Management announced launching two overseas real estate investment trusts (REITs) to invest in three logistics centers in Vietnam and multifamily housing assets in the US. In August, it attracted capital from eight Korean limited partners and committed 550 billion won to Bridge Debt Strategies Fund IV, a 2.4 trillion won pooled investment vehicle targeting multifamily housing loans in the US. 

The Korean asset manager and two other Korean institutions invested about $68.5 million in mezzanine debt secured by a Manhattan office building from Blackstone Group in 2017.

Write to Jihyun Kim at snowy@hankyung.com

Jihyun Kim edited this article. 
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