Predicting shipping defaults : an empirical study of the driving forces of default in the shipping industry

Andersson, Niklas; Bejemark, Karl Martin Zanzi
Master thesis
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https://hdl.handle.net/11250/2678280
Date
2020
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Abstract
This study empirically investigates the driving forces of default at the time of issue in the

shipping industry. By developing a logit model based on a sample of 64 shipping bonds and

loans, it is shown that the most important factors in predicting shipping defaults are the

financial health of the company and the macroeconomic state of the world. This study

contributes to the existing literature by emphasizing the forward-looking features of the

model, strengthening the long-range predictive accuracy. For the first time in the shipping

literature, VIX is shown to be an important factor when predicting shipping defaults. The study

is of interest to banks specializing in shipping, shipping bond investors, and any institution or

professional dealing with credit assessment in the shipping industry.