Morgan Stanley will create an opportunity fund to invest $400m in dry bulk and container vessels during the economic downturn.

The bank is expected to sign an agreement with two Greek shipping organisations to create the debt fund to focus on distressed investments in shipping, according to The Telegraph.

With sellers under pressure to provide deep discounts, there has been a withdrawal from previous liquid ship markets.

The shipping debt will be sold for nearly 60% discount.

It is estimated that about $600bn of debt is attached to ships and the shipping industry, the majority of which is financed by German and UK banks.

Morgan Stanley will invest in about 40 ships lying idle because of the economic conditions through the purchase of debt.

By staff writer