2020 Baltic Academy courses / New York / Singapore

Freight Derivatives and Shipping Risk Management Advanced Freight Modelling and Trading Ship Finance Executive Shipping Economics and Investment Bunker Hedging Post IMO 2020 Managing LNG Freight Risk Using Futures balticexchange.com Training Courses 2020 The Baltic Exchange runs a series of these courses participants will learn skills professional training courses through its which they can use in their day to day Academy. These take place in key shipping business. Launched in 2005, each course centres and are designed to help shipping, involves a mixture of classroom teaching, fi nance and commodity executives build on practical exercises, group discussion and their knowledge of the maritime markets. case study analysis. Comprehensive The courses are led by experts and deliver a study notes are provided, together with a high level education, combining theory with certifi cate of attendance. real-life practical examples. By attending For course dates please refer to page 9.

Freight Derivatives & Shipping Ship Finance Executive Bunker Hedging Post IMO 2020 Risk Management The course aims to raise awareness This half day course is for bunker This course provides an overview of the substantial benefi ts and risks of buyers, traders and suppliers of risk in the shipping business. equity and debt fi nance, to shipping wishing to understand how IMO Topics covered include freight companies looking for capital and 2020 may aff ect the hedging of rate risk management, derivative to investors looking at shipping as a bunker fuel prices as the ‘old’ instruments, options, market with increasing accessibility contract disappear and ‘new’ bunker and fi nancial risk and potentially strong returns on ones emerge. Attendees will learn management, ship price risk investment. best practices in bunker fuel price management, Value at Risk and risk management, using new low credit risk. Using a variety of real-life examples, sulphur fuel oil contracts and gasoil course participants will learn how contracts as well as basis risk The course is suitable for shipping an IPO is made, what to look for between ports and how to manage professionals looking for an insight when choosing an underwriter, regional discrepancies. into the use of derivatives in their how to identify an under-priced IPO business and fi nancial executives before it is made public using only US$ 600/ S$ 800 who need to understand how the publicly available information, how work. to issue a high-yield bond and how Managing LNG Freight Risk to calculate the probability Using Futures £1575 + VAT (UK only) a high-yield bond will default. How to trade and use FFAs eff ectively to manage pricing risk Advanced Freight Modelling £1575 + VAT (UK only) from volatility in LNG freight rates. & Trading This half day course is designed to Shipping Economics This course is designed to be taken help build confi dence in using new & Investment after Freight Derivatives & Shipping indices from the Baltic Exchange in Risk Management, but is suitable The course gives delegates a managing risk for shipping and is for experienced freight traders. theoretical foundation and practical suitable for both LNG and shipping The advanced two day module experience of modern shipping company executives. focuses on pricing freight options, economics and investment. modelling freight rate dynamics The programme covers the US$ 600/ S$ 800 and pricing options on freight. It micro-economic structure of covers constructing forward curves the shipping markets. It looks on freight, modelling freight rate at the fundamentals of shipping volatility as well as hedging and investment including cash fl ow trading strategies using FFA and projection and analysis, capital freight options. budgeting techniques, capital structure and cost of capital in £1575 + VAT (UK only) shipping projects, investment management of shipping projects, asset allocation and shipping investment strategies.

£1575 + VAT (UK only) The course leaders

Professor Nikos Nomikos He lectures in international commodity trade, commodity derivatives and trading, energy economics and shipping Professor Nikos Nomikos of Cass economics. His research interests are in the areas of Business School, is the director of the commodity economics, energy derivatives and shipping highly-respected Shipping, Trade and economics. Michael has been involved in many research Finance MSc course and co-author and consultancy projects, presented and delivered talks at of the leading reference book on many international conferences, and published many articles shipping risk management – Shipping in energy and fi nance journals, as well as a textbook on Derivatives and Risk Management. Commodity Trade and Finance. Professor Nomikos has collaborated with a number of companies both as consultant as well as educator and has published more than 50 papers in leading international academic journals. His views on commodity and shipping Professor Amir Alizadeh markets are also frequently profi led in the press. He has Amir Alizadeh is Professor of Shipping published more than 50 papers in leading international Economics and Finance and a member academic journals in the areas of shipping fi nance, asset of faculty at the Centre for Shipping pricing and commodity risk management. His views on Trade and Finance. Currently, he commodity and shipping markets are also frequently profi led lectures in Advanced Quantitative in the press. Methods, Shipping Investment Professor Nomikos holds a number of faculty visiting positions and Finance, Oil and Energy Transportation & Logistics, at University of Geneva, Copenhagen Business School, Econometric Modelling, Shipping Risk Management, Energy International Hellenic University and Singapore Management & Weather Derivatives, and Energy Project Investment University. He has a BSc in Economics from Athens University and Finance. His research interest includes, modelling of Economics and Business, an MSc in Shipping, Trade & freight markets and markets for ships, derivatives and risk Finance (Distinction) from Cass Business School and a PhD in management in fi nancial and commodity markets, and Finance from Cass Business School. He is also a Member of forecasting. He has published in several academic journals the Institute of Chartered Shipbrokers. in the area of transportation, fi nance and economics. He also has visiting positions at University of Geneva and Copenhagen Business School, ESCP Europe, and serves on the Editorial Board of Transportation Research Part E and Journal of Dr Nikos Papapostolou Multinational Finance, and is a member of the scientifi c Nikos has been with the Costas committee of the Swiss Research Institute on Commodities Grammenos Centre for Shipping, Trade (SRIC). He has been in close contact with the industry, acting and Finance since 2002. He is a Senior as an adviser and consultant for a number of the trading Lecturer in Shipping Finance, acts as and shipping companies and institutions including the A P the Associate Director to the Centre Moller Maersk, Danish Maritime Cluster, Geneva Shipping and he is the Director of the MSc in and Trading Association (GTSA), Barclays Capital, Standard Shipping, Trade and Finance and Stelios Scholars Programme Chartered Bank, amongst others. Lead at Cass Business School. His research interests are in the fi eld of shipping investment and fi nance, with a focus on capital markets as a source of fi nance for shipping companies, Mikal Bøe investors’ sentiment and behaviour in the shipping industry, freight options pricing and vessel valuation, technical Mikal is a senior executive with analysis trading rules, and commodity derivatives. He holds 28 years’ experience in shipping, a BSc in Money, Banking and Finance from the University of technology and commodities; with Birmingham, an MSc in Shipping, Trade and Finance and a particular focus on risk management. PhD in Finance from City, University of London. Prior to starting CORE-POWER in 2016, Mikal served as Chief Risk Offi cer and Director in charge of Singapore offi ce for Thoresen Professor Michael Tamvakis Thai Agencies (BKK:TTA) an Asian industrial group stock listed in Thailand. He previously served as Chief Risk Offi cer for Michael Tamvakis is a Professor of Eagle Bulk Shipping (NASDAQ:EGLE) in Singapore and New Commodity Finance at Cass Business York; and spent many years at , the fi rst regulated School, City University London. He marketplace for freight derivatives. has a degree in economics from the Athens University of Economics and Several unique new businesses were started by Mikal, Business, and MSc and PhD from including bunkerworld.com (1997) sold to S&P Platts in Cass Business School. He is also a 2013, Cleartrade Exchange, now part of the EEX and owned visiting Professor at the University of Geneva. by Deutsche Boerse and CORE-POWER - established to spearhead the development of a commercial market for the ‘Liquid Fluoride Thorium Reactor’ in transport and industry. Freight Derivatives & Shipping – Interest rate caps, fl oors and collars Risk Management – Interest rate and currency swaps and swaptions

Day One Case study on shipping risk management – Highlight as Practical Example Introduction to shipping risk – Integrating all aspects of shipping risk – Types of shipping contracts – Presentation of the case – Sources of risk in shipping – Using spreadsheets to solve the case – Market segmentation and sectoral diff erences – Discussion – Comparison of risk across diff erent shipping markets Ship price risk management – Portfolio theory A primer on risk management – Diversifi cation and risk-return optimisation – Introduction to derivative instruments – Baltic Sale & Purchase Assessment, Baltic – Forwards, futures, options and swaps: Demolition Assessment, Sale & Purchase Exchange-Traded vs Over-the-Counter Forward Agreements – Credit risk and clearing Value at Risk (VaR) in shipping Freight rate risk management – Estimating volatility – daily vs yearly – Freight market information – Measuring and estimating VaR: single asset – The practicalities of FFA trading vs multi-asset portfolio – Documentation and settlement – VaR methodologies – Electronic trading – Examples of estimating VaR of FFA portfolios – FFA and hedging examples for spot, time-charter container and tanker routes Credit risk in shipping – Exercise on freight risk management – Probability of default vs loss given default – How to measure credit risk: qualitative vs Freight rate options quantitative methods – Option terminology – Credit risk and credit ratings – Using freight options for hedging – Credit risk measurement in shipping – Option trading strategies – Credit derivatives and credit risk management – Freight options pricing in shipping

Day Two Advanced Freight Modelling & Trading Bunker risk management – Bunker market fundamentals Day One – Importance of bunker risk management in shipping Introduction to the freight market – Use of bunker derivatives – Freight contracts – Forward bunker contracts: hedging – Characteristics of the freight market and trading – Relationship between spot and time-charter – Options on bunker prices freight rates – Exercise on bunker risk management Forward Freight Agreements Financial risk management in shipping – Practicalities of trading – Interest rate risk – Hedging and trading examples – Financing examples and sources of interest rate risk Spot price dynamics – Hedging interest rate risk using forwards – Mathematical models for freight rates and futures – Mean reversion, seasonality and jump diff usion models: Estimating and setting up models Forward curves Real options in shipping – Forward curve construction – Key option value drivers – Diff erent types of real options Technical analysis & freight trading – Option to choose (spot vs time-charter) – Chart analysis – Option to lay-up – Technical trading rules – Real options and ship valuation – Spread trading – Real options and extended Net Present Value – Implied TC rates – Identifying & valuing real options in shipping

Risk management using options Writing and risk management of – Freight options option positions – Hedging with options – Option price sensitivities (Greeks) – Option trading strategies – Dynamic & Static Delta Hedge – Delta-Gamma hedging Day Two – Greeks of Asian options

Modelling freight rate volatility Value at Risk of shipping freight rates – Volatility models: Historical, time-varying – Estimation & interpretation and implied – VaR methodologies – Estimation and interpretation – VaR for nonlinear instruments – Forecasting volatility

Pricing freight options – Determinants of option prices The lecturers are at – Pricing Asian options using closed-form models the top of their game – Monte Carlo Simulation Freight Trader, Cargill Ship Finance Executive – Defaults and restructuring options in shipping – Probability of default for shipping high yield Day One / Banking and Equity Capital bond issues Markets Practical example (excel-based): Estimation Introduction to ship fi nance of default probability by employing readily – Overview of sources of fi nance available to shipping available information companies: bank debt, bonds, public and private equity, leasing and mezzanine fi nance. Bank credit – Current trends and developments in ship fi nance – Types of Bank Credit Facilities

Equity public off erings Practical example (excel-based): Preparing a – Reasons for going public; advantages and Bank Proposal for a Shipping Term Loan disadvantages for shipping companies – Company valuation techniques, underwriters Portfolio management of shipping loans and the IPO process – Risk models and quantitative risk analysis of – Institutional investors and shipping stocks shipping loans – Cash fl ow analysis for shipping projects. Pricing of shipping stocks – Underpricing; factors aff ecting fi rst day trading Shipping company valuation case study returns of shipping stocks Practical analysis of a company valuation case – Estimation of probability of underpricing of study using diff erent methodologies shipping IPOs Shipping sentiment, cycles and shipping Practical example (excel-based): Selection of assets investment IPOs for asset allocation and investment purposes – Quantifying shipping sentiment using market variables Financial strength and ranking of public – Sentiment and shipping cycles shipping companies – Choice and estimation of fi nancial metrics; Practical example (excel-based): Shipping Ranking process cycles prediction using shipping sentiment

Practical example (excel-based): Ranking of Practical example (excel-based): Shipping shipping companies and fi nancial strength index sentiment as an investment trading tool for the sale and purchase of second-hand vessels Initial public off ering case study Practical analysis of a shipping IPO prospectus Shipping stocks investment focusing on the: deal structure; strengths and – Passive vs. active portfolio management weaknesses; timing and pricing of the off ering; – Index tracking and shipping stocks portfolio fi nancial strength of issuer relative to the construction industry average – Shipping investor sentiment and stocks investment Day Two / The high yield bond market; Risk management of real assets; Shipping Practical example (excel-based): Formulation of investor sentiment, and shipping assets trading strategies based on index tracking and stock investment Practical example (excel-based): Sentiment- High yield bond issues based trading strategies for shipping stocks and – Advantages and disadvantages for shipping stock market indices companies, and the issuance process – Role of credit rating agencies; process of assigning a credit rating (excel-based illustration) Shipping Economics shipping, supply-demand analysis and freight and Investment determination, major trades and players – Liner and container shipping, structure of liner Day One / Shipping Economics shipping industry, standardisation, pricing strategies and key factors in pricing Introduction to the shipping industry – Overview of shipping market structure, Overview of current trend and developments shipping sectors, fl eet and international trade in shipping and freight markets – Ownership structure, ship registries and – Environmental: Regulations, ballast water, international shipping regulations and emissions – Operational: ship design, fuel effi ciency, Economic analysis of shipping markets and operational optimisation – Freight market, micro and macro analysis – Discussion on trend and developments and freight market in diff erent shipping sectors – Second-hand market, the S&P process, key value drivers, and vessel valuation Day Two / Shipping Investment – New building and scrap markets, ship building supply and demand factors, determinants of Cash fl ow analysis of shipping projects new building prices, scrap price determination – Cash fl ow projection, operating costs and revenue, capital cost, repairs and special surveys Shipping costs and revenue management – Cost of capital, break even analysis, and loan – Types of shipping contracts, negotiation repayment in shipping projects and pricing – Charter parties, voyage, time-charter Exercise: cash fl ow projection and parties – Costs: Capital, operating and voyage costs, Project appraisal and investment decision voyage estimation in shipping – Capital budgeting techniques, NPV, IRR, PI, Exercise: voyage cash fl ow analysis and Payback analysis Specialised shipping sectors – Investment appraisal of shipping projects – Economics of LNG, LPG and Chemical – Asset and project valuation techniques, second-hand, new building and scrap valuation

A full on two day programme. Great mix of theory and practical examples Senior Charterer, Rio Tinto Exercise: Investment appraisal Hedging bunker price exposure with new contracts Capital structure and cost of capital in – Term structure and oil market dynamics shipping projects – The new low sulphur fuel oil contracts, market – Determination of cost of capital, Capital asset mechanics post 2020 pricing model, Multifactor model – Low sulphur marine gasoil contracts – Capital structure, WACC and optimal leverage – Basis risk and regional price diff erentials, best – Market condition, loan structure and practice hedging capital costs – New hedging strategies – practical examples – Execution, clearing, collateral and cash Exercise: WACC calculation management

Investment decision and uncertainty in shipping – Application of risk analysis in shipping projects Managing LNG Freight Risk and investment Using Futures – Scenario analysis, probabilistic scenarios and Monte Carlo Simulation techniques The Baltic BLNG Index – Real Option Analysis (ROA), optionalities in ship – Comprehensive understanding of the BLNG valuation and projects Baltic Index and Index methodology – The role of panels and integrity of the market Exercise: Monte Carlo Simulation and – Pricing of the Index on time charter and investment appraisal voyage charter – Calculating ‘Basis Risk’ between the LNG Index Investment management in shipping and main LNG trading routes – Shipping investment strategies, optimum timing, – Index Settlement mechanisms and correlations and diversifi cation – Term structure of the LNG forward curve – Dynamic and adaptive asset allocations, – Contango, backwardation, inversions and and performance evaluation seasonality – Risk based asset allocation and asset play – Tactical asset allocation and shipping Putting it all together with FFAs equity investment – Composition, construction and use of an LNG FFA derivatives contract – Practical application of LNG FFAs to freight contracts and time charters Bunker Hedging Post IMO 2020 – Calculating pricing risk, calendar risk and cash fl ow Bunker risk management essentials – Settlement mechanisms – The economics of a bunker hedge in a COA – Leverage and Margining and mark-to-market and for bunkers on redelivery – Stress testing – Classic signs of when to hedge and when to – Examples and practical uses of an LNG fl oat on the spot market FFA contract – Tried and tested hedging strategies – practical examples – How IMO 2020 changes bunker hedging, and why

Bookings to: 2020 Schedule Navigate PR London / New York / Singapore The Baltic Exchange 38 St Mary Axe Freight Derivatives and London EC3A 8BH Shipping Risk Management +44 (0)20 3326 8450 9-10 March 2020 (London) [email protected] 7-8 September 2020 (Singapore) Book online at bit.ly/1tFX2BQ 5-6 October 2020 (London) 7-8 December 2020 (Houston)

Chartering managers Advanced Freight Modelling Shipbrokers and Trading Bunker Wet & dry managers vessel 11-12 March 2020 (London) operators 9-10 September 2020 (Singapore) Lawyers 7-8 October 2020 (London) WHO FFA traders ATTENDS? 9-10 December 2020 (Houston) S&P Bankers brokers Ship Finance Executive Commodity 9-10 November 2020 (London) Managing Finance traders directors directors Analysts Shipping Economics and Investment (London) 13-14 January 2020 (London) 26-27 October 2020 (London)

Bunker Hedging Post IMO 2020 4 February 2020 (Singapore)

Managing LNG Freight Risk Using Futures Terms & conditions 5 February 2020 (Singapore) The Baltic Exchange must be in receipt of full payment prior to the day of the training course or your nominated Please note that the above dates are subject delegate(s) may not be allowed entry to the seminar. to the latest government advice and subject Cancellations 14 days or more prior to the course will to further change. be refunded at 50% of delegate fee. Cancellations within 14 days cannot be refunded. All cancellations must be received in writing. Names of delegates may be changed at any time without charge and notifi cation of name changes should be made in writing. Registration fees include lunch and refreshments and course notes. About the Baltic Exchange The Baltic Exchange is the world’s only independent source of maritime market information for the trading and settlement of physical and derivative contracts. Its international community of over 640 members encompasses the majority of world shipping interests and commits to a code of business conduct overseen by the Baltic. Baltic Exchange members are responsible for a large proportion of all dry cargo and tanker fi xtures as well as the sale and purchase of merchant vessels. In November 2016, the Baltic Exchange was acquired by (“SGX”), bringing together complementary strengths of Singapore and London, two of the world’s most important maritime centres.

Baltic Exchange services –Independent, high quality dry, wet and gas freight market information –Self-regulated , sale and purchase and freight derivatives markets – Central forum for competing freight market interests –Framework ensuring high standards of business practice and co-operation – London-based business facilities for members

balticexchange.com Conti Reederei International Shipping and Phoenix Bulk Carriers Who Cooperative Bulk Handling Logistics Pretrobas Petroleo Coordinadora Ispat Industries Prime Marine Copenhagen Business School Itoro Corp Prosperity Marine attends? Copenship J Aron P-Ships Representatives Copersucar J Lauritzen Qatar Gas Transport Company Core Petroleum JERA Trading Qatar Navigation from the following CSAV Norasia K Line Bulk Shipping Qawareb Ship Management companies have Cumulus Asset Management KC Maritime Quadra Commodities D/S Norden Kirk Capital RBS Shipping attended the courses: Dae Yang Shipping Kuwait Petroleum Redpath Sugar D’Amico Dry Lalemant Reliance Industries A Bilborough D’Amico Tankers Laskaridis Shipping Reuters ADM International Dana Shipping & Trading LCH Clearnet Rio Tinto Aegean Shipping Management SA DH Tankers LERBRET & CIE SAS Riverlake Shipping Aegir Management DNB Bank Leros Management RMK Maritime Aegis Overseas Drax Power Station Lorentzen & Stemoco Royal Bank of Scotland AET Tankers DVB Bank Louis Dreyfus RWE AgriService Dynacom Tankers Lykiardopulo & Co Saga Welco Alfred C Toepfer EA Gibson Shipbrokers M2M Management Saltwater Bulk Shipping Alpha Shipping and Chartering Eastern Bulk Carriers Maersk Salzgitter Flachstahl AM Nomikos ED&F Man Shipping Mainline Shipping San Miguel Corp Amaggi EDF Man Asia Marenave Schiff ahrts Scanmills Amarante Shipping EDF Trading Singapore Maritime 24 Scottish Power Anglo American Eitzen Masterbulk SCS Apex Bulk Carriers Electric Power Mctaggart Shipping and Seatrek Trans Development Co. Management Co Aquila Maritime Management SEB Arch Coal Emarat Maritime Mercator Lines SGM Shipping Services Ardmore Shipping Services Embiricos Shipbrokers Mercuria Energy Trading SGX Arista Shipping S.A. Emerald Grain Merill Lynch Shell Augustea Holding Emirates Ship Investment Co Mid-Ship Marine Sims Metal Management Avra Asia Enel Trade Milestone Shipping Siva Bulk Shipping Baere Maritime Energy Argus Mitsubishi Corporation SK Gas International Banchero Costa Eni Trading and Shipping International SKS Bank of Ireland E.ON Mitsubishi Corporation Sobelnord Bank of Nova Scotia Equinox International (Europe) South32 Baringa Partners Euro Marine Logistics Mitsui & Co Europe Southampton Solent University Barry Rogliano Salles Euroceanica Mitsui OSK Sovcomfl ot Berenberg Bank European Energy Exchange AG Morgan Stanley Standard Bank Berge Bulk Shipping Excel Maritime Carriers MPA Singapore Standard Chartered Bank BHP Billiton ExxonMobil MUR Shipping Statoil Bibby Line Fednav Murmansk Shipping Stena Bulk BNP Paribas Femis National Bank of Fujirah Suek Bominfl ot Financial Conduct Authority Navigator Gas Tailwind Shipping BP Shipping FinnFleet Tankers Navix Maritime Chartering AB Taipan Shipbrokers BRS Brokers Fokus Bank Neoria Compania de Tata NYK Shipping Brunei Gas Carriers Foresight Naegacion SLU TBS Shipping Bulcom Fortuna Chartering NEPA Shipping Teekay Shipping Bunge Frachtcontor Junge Nero Shipmanagement The China Navigation Company BW Maritime Pte Ltd GC Tankers Newport Shipping The Hadley Shipping Co. Byzantine Maritime Corporation GDF Suez Newlead The Lion Group Calyon GE Transportation Finance NIBC Bank Thoresen & Co Canadian Forest International Gearbulk UK Nidera Holland Thurlestone Shipping Canchart Pte Ltd Genshipping Noble Agri Torm Cape Tankers Gestion Maritime Nom UK Toru Bulk Cargill International GK Compass Nordea Bank Torvald Klaevness Castallia Fund Management Glencore Nordic Bulk Carriers Total CBH Group Glory Ship Management Nova Shipping & Logistics Trafi gura CC Maritime Golden Flame Shipping NS Lemos Transcenden Global Chandris (Hellas) Goldman Sachs NS United Triworld Chart-it Ship Brokers b.v Goodrich Maritime NYK Bulkship (Atlantic) NV Trust Energy Resources Chartworld Shipping Goulandris Brother Olam International United Arab Shipping Co Chinese Maritime Transport Graig Ship Management Oldendorf Carriers Univan Shipmanagement Chios Navigation (Hellas) Great Eastern Shipping OSG Ursachart Chubu Energy Trading Heidmar Paccship UK Ltd Vale International CIT Maritime Finance Holbud Pacifi c Basin Shipping Veson Nautical Clarksons HSBC Pacifi c Carriers SG Viterra Clipper Group HSH Nordbank Pacifi c Rim Shipping Vroon CMC Coal Marketing Company Ltd Hua Dao Shipping Paradise Navigation Watson Farley & Williams Cobelfret ICAP Shipping Paralos Maritime Corporation West Asia Maritime Coli Schiff ahrt & Transport Ifchor Pasternak Baum & Co Western Bulk Bremen IINO Shipping PCL Shipping Wisdom Lines Concord Energy Imerys Perdue Grain Wolid International Services ConocoPhilips Ince & Co PETCO Trading Assoc Constellation Intermar Petrochina International Zim Petronas This course, through its knowledgeable instructors, delivers an invaluable understanding of the critical, yet often under-utilised function of risk management as it pertains specifi cally to the various aspects of the maritime sector Bunker Manager, Heidmar

Gave me an insight into the derivatives markets Chartering Manager, Teekay Shipping