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OPEC'S DILEMMA
SHIPPING STOCK PRICES DIVED

Ship mortgage loan margins have been dropping; no one knows how far they will fall. As the table indicates, loan pricing has dropped from around 300+ basis points to below 200 basis points over the past 24 months. For English majors (like me) the math works like this: 100 basis points = $1 million less margin income on every $100 million debt. That’s a lot. Companies: Moody, S&P, Mercer, TPG Twin Brook Capital Partners, Goldman Sachs Asset Management, Ares Management, T. Rowe, Invesco, Franklin Templeton, Preqin, Bain, Blackstone, KKR, Carlyle, Ares

This week we received Dealogic’s “Marine Finance Rankings Syndicated Loans – Second Quarter 2024,” suggesting some interesting trends that we have indicated in our monthly Deal Digest.

BW LPG and Avance Gas weren’t the only participants on the Marine Money Week has panel to have a busy summer. Last week, fellow panelist, Navigator Gas, agreed to their own summer deal. Companies: Navigator Gas, KKR, Ocean Yield , Crédit Agricole CA CIB, ING Bank N.V., SEB AB, Ten08 Energy, Attis Clean Energy

With the public equity market closed, or at least not always offering attractive valuations, we have witnessed increased institutional investment in the Jones Act and U.S. Flag markets recently. Of the 18 mergers, acquisitions and business combinations outlined last week in the table “Recent Jones Act/US Flag Related M&A,” 13 involved a financial or institutional investor, a whopping 72%! Talk about financialization. Companies: Saltchuk/OSG, Hanwha Ocean/Philly Shipyard, JPM/Bold Ocean, Crowley Maritime, Fairwater, Seacor, American Industrial Partners, Crowley Wind Services Holdings, Morgan Stanley Infrastructure Partners, U.S. DOE, Global Wind Energy Council, Pasha Group

As the weather begins cooling down, the opposite seems to be true of the bond market, in particular the Nordic bond market. Companies: Ocean Yield, Golar LNG, SFL, Arctic Securities, DNB Markets, SEB , Fearnley Securities, Pareto Securities, Clarksons Securities

The multi-year takeover battle between Fredriksen, Euronav, and Saverys culminated late last year in an elegant solution. It was agreed that Fredriksen would sell his stake in Euronav to the Saverys family for just over $1.1 billion. Companies: Fredriksen, Euronav, Saverys, Frontline, Hemen Holdings, CMB Leasing

The term “hedge fund” is loaded with sexy associations. To name a few: Michael Burry’s “Big Short” of the U.S. mortgage market or George Soros bringing down the Bank of England or managers like Jim Simons whose Renaissance Technologies delivered an annualized 36% return after fees. Companies: Renaissance Technologies, Barclay’s Hedge Fund Index , S&P 500, Tufton’s Oceanic Hedge Fund, Sissener Canopus, Hayfin, Borealis

Last Thursday, Avance Gas announced an agreement with BW LPG Ltd. to sell its fleet of VLGCs for USD 1,050 million. Avance Gas will continue operating the vessels until December, allowing them to collect charter rates until the end of the year. Company: Notos

The past week has seen numerous debt facilities, from lease transactions to refinancings or both, from private credit funds to banks, and in the sizes from just above $5 million to nearly $1.0 billion… Talk about variety! Companies: Crédit Agricole, ABN AMRO, Bank of America, Flex LNG, AVIC Leasing, Seanergy, United Maritime

Last week, we highlighted several hedge funds focused on shipping or related industries. What stood out to us wasn’t necessarily their performance—though most have enviable track records—but their uncorrelated returns relative to the broader market (as measured against the S&P 500). Companies: S&P 500, The Albemarle Shipping Fund, Albemarle, Medallion Fund

Just minutes after an earnings call, Ocean Yield ASA (“Ocean Yield”) announced their contemplated, and now successful, senior unsecured bond issuance of NOK 1,251 million (approximately $118 million) due September 2029. Companies: Ocean Yield ASA, Arctic Securities, Danske Bank, DNB Markets, Nordea, SEB, BAHR, Navigator Gas, CVC DIF, Geogas LNG, France LNG Shipping ASA, NYK, Totale Energie, EDF, KKR

Marine Money’s mantra has always been that our events are…Where Deals Get Done! For example, what started as a casual remark during the LPG panel discussion at Marine Money Week made headlines last week. Companies: Fearnley Securities , Avance Gas, BW LPG, DNB Markets, BW Group,

Bond issuance slowed a bit in the second quarter this year, perhaps a result of the frenzy of issuances earlier in the year, or because of lower capex needs as markets remain strong, or even because finding new opportunities to invest has become more challenging. Companies: Borr Drilling, Seatrium

On the surface, convertible bonds represent a rather simple concept. Investors purchase interest bearing notes, which can eventually be exchanged for common shares at a predefined conversion ratio (usually representing a premium to the market), effectively like a call option and its strike price. Companies: Eagle Bulk, Dorian LP, SFL Corporation, Scorpio Tankers, B. Dyson Capital Advisors , Star Bulk

Over the past year, shipyard transactions have picked up pace. Between healthy commercial shipping markets and geopolitical tensions, shipbuilding capacity has become a significant focus across sectors. Companies: Jones Act, Harland & Wolff, Center for International Strategic Studies, Hanwha, Philly Shipyard, China State Shipbuilding Corporation (CSSC), China Shipbuilding Industry Company (CSIC), China Shipbuilding Group Corporation

Over the past twelve months, the LNG sector has underperformed the Notos Shipping Index, with LNG shipping companies gaining 20% less than the broader market.

Cadeler, the Danish offshore wind service provider, who is also the world’s largest operator of offshore wind installation, operations, and maintenance services, recently announced the strengthening of its financial position with the refinancing of two major loans, one of which was entered into by Eneti Inc. before their business merger. Companies: Cadeler, Eneti Inc., Crédit Agricole, Société Générale, Eksfin, KEXIM, KSURE, KfW IPEX, Crédit Industriel, Korea Development Bank, The Danish Export and Investment Fund, DNB, Rabobank, Danske Bank, Oversea-Chinese Banking Corporation, Standard Chartered Bank

Ship investing continues to be a calculated market, according to the latest data reports from the Baltic Exchange’s Investor Indices.

Hayfin Capital Management (“Hayfin”) has had a meteoric rise since its founding in 2009, just 15 years ago. The firm holds 31 billion Euros in assets under management, has 500+ portfolio companies, and 13 offices globally… Companies: Hayfin Capital Management, British Columbia Investment Management Corporation, RJR Nabisco, KKR, Shearson Lehman Hutton, Arctos Partners