Listed passenger shipping companies may finally be entering calmer seas, at least as far as their indebtedness is concerned. According to an annual survey by XRTC, consultants on maritime affairs to French bank Credit Lyonnais (whose Greek business was taken over by Piraeus Bank), listed passenger shipping firms’ indebtedness fell for the first time in the past five years in 2003. Total indebtedness to financial institutions dropped 5.22 percent, to 1.941 billion euros, from 2.048 billion at the end of 2002. This reduction is mainly due to two reasons: the debt restructuring achieved by firms thanks to lower interest rate levels, and the sale of new ships. The five biggest passenger shippers – Minoan Lines, ANEK, Strintzis Lines, Attica Enterprises and Maritime of Lesvos (NEL) – have borrowed from 37 different banks in 10 countries. Specifically, 48 percent of the 1.941-billion-euro debt is owed to German banks and 27 percent to Greek banks. The rest of the debt, a quarter of the total, is to banks registered in the Netherlands (8 percent), France (7 percent), the United States (7 percent) and in five other countries (3 percent). Attica Enterprises accounts for 35 percent of the total debt, followed by Minoan Lines (31 percent), ANEK (17 percent), Strintzis (11 percent) and NEL (6 percent). The greatest part of the loans were not taken from just one bank but were syndicated loans. According to the report, the smallest contribution by a bank to a syndicated loan was a mere 200,000 euros, while the largest single contribution was 496 million. Loan restructuring Companies, as well as individuals, resort to loan restructuring in order to reduce annual payment installments that may be considered excessive, relative to the borrower’s financial capacity. Restructuring, done almost exclusively when interest rates are dropping, also helps transform a short-term loan into a long-term one, thus making annual payments more affordable. Companies can thus afford to expand by spending more on investments. In a sense, banks play a regulatory role, because it is their response to a request for loan restructuring that will determine the scope of a company’s business plan. Almost all negotiations for loan restructuring were successful. This proves that Greek passenger shipping firms have built a trusting relationship with financial institutions, something that was not a given a few years ago, when many shippers faced a financial crisis. Moreover the obligation by passenger shippers to renew their fleet in line with new regulations imposing an age limit of 30 years in the near future, will further interest the banks in financing the sector, as more orders for new ships are expected. In order to eliminate any doubts or fears on the part of the banks, the State must intervene in two ways: First, it must ensure that the deregulated domestic market will operate under regulations that will not change every few years and that will ensure viability; second, passenger shippers must cooperate and not be adversaries. This will reduce risks for the lenders.