Plummeting container ship values are causing a headache for financiers and owners that tied up deals at the peak of the market.

Falls of more than 50% in vessel values have resulted in the loan-to-value (LTV) covenants imposed by several banks being breached, triggering a series of “soft defaults” across a portfolio of banks, according to Hamburg-based ship financier Oceanis.

The breaching of covenants follows the rapid decline in secondhand ship values in the past nine months.