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Like other earlier beneficiaries of leasing, Höegh Autoliners ASA continues the process of unwinding its bareboat leases through the exercise of purchase options with the intent of reducing the cash capacity cost of the vessels, realizing value gains from the lease purchase options and to have better capacity cost control in an overheated charter market.

The quarterly earnings reports of the majority of shipping companies highlight the fact that the industry has a wished for problem – what to do with its mountains of cash. Of course, capital allocation provides the necessary answers.

Golden Ocean Group Limited announced last week it had entered into an agreement to acquire six modern 208,000-dwt Newcastlemax bulk carriers equipped with scrubbers for total consideration of $291 million.

Late week, in a highly accelerated process, Color Group AS successfully placed a new 3.5-year senior unsecured bond issue of NOK 900 million.

Back in January, TORM entered into two agreements to acquire a total of seven LR1s built between 2011 – 2013 built at renowned Korean and Chinese shipyards for an aggregate purchase price $233.0 million.

For Navios Maritime Partners L.P., 2022 was a very good year as it reported revenue of $1.2 billion, and net income of $579.2 million suggestive that its strategy of operating a diversified fleet is working.

The disruption to the tanker trades created by the war in Ukraine has created an immense opportunity for tanker investments. Unfortunately, demand far exceeds supply, but that was not an issue for Pareto Securities, which cleverly worked both sides of a trade, creating a likely win-win transaction for both the seller and buyer.

It was a good year for Hamburg Commercial Bank (“HCOB”), which reported on a preliminary basis a strong group net result for 2022 of EUR 425 million after taxes (up 21%) driven partially by an increase of net interest income of 19 percent.

On Monday, Golar LNG Limited announced that it would acquire New Fortress Energy’s ownership stake in the FLNG Hilli, representing a 50% interest in Trains 1 and 2, in exchange for $100 million in cash, Golar’s remaining 4.1 million shares in NFE acquired in the sale of Golar Power and the assumption of approximately $323 million in debt linked to the vessel.

Since 2021, d’Amico International Shipping S.A. (“DIS”) has acquired five of its chartered-in vessels, taking advantage of both rising asset values and improved liquidity.

Last week, Belships ASA announced that it had entered into agreements to acquire three new 64 000 dwt Ultramax bulk carriers which are being constructed at Japanese shipyards with delivery expected to occur in Q4 2024, Q4 2025, and Q1 2026.

Going to extremes, Danaos Corporation cleaned its house of debt creating a proverbial fortress balance sheet. With the container market in steady decline, economic conditions uncertain, and a substantial orderbook to be delivered, the yellow traffic light urged caution.

In his note on DHT Holdings, Inc.’s Q4 earnings, Evercore’s Jon Chappell noted that: “DHT has done most of the heavy lifting on cycle-proofing its capital structure, getting its balance sheet to a place (20% net debt to capital at year-end 2022) where capital returns and fleet investment do not have to be mutually exclusive.”

The stock market remains a mystery to us. Earnings are of little consequence as compared to non-GAAP financial measures including cash flow. Stock prices also fall or rise depending on how the quarterly results compare to analyst estimates and, of course, their latest recommendations.

Borr Drilling Limited’s (“Borr”) $350 million convertible bond is due May 2023 and needed to be dealt with. In simple terms, the company was faced with the choice of whether to replace the bond with another convertible bond or a traditional bond.

Certainly, a “near-death” experience captures one’s attention fully. In the case of Teekay, that description is not quite apt, but without a doubt the company, back in 2020, faced a mountain of debt. Their fate was determined.

The highlights from Flex LNG’s Q4 2022 earnings release reflect remarkable achievements by its management team. It all began with the addition of a minimum of 38 years during 2022 to its contractual backlog through the extension of time charters with existing customers.

Last week, Höegh LNG Holdings Ltd. announced that it has signed a new loan facility with a strong group of international banks to refinance the FSRUs Höegh Esperanza and Höegh Gannet, which are both employed on ten-year charters to the Federal Government of Germany.

Last week, Stena International S.A., a subsidiary of Stena AB, successfully placed €325 million of Senior Secured Notes in the 144A/Reg. S market. Maturing in February 2028, the Senior Notes bear interest at 7.25 percent.

This week, MPC Container Ships ASA (“MPCC”) announced further measures that it has recently taken with respect to portfolio optimization and capital allocation.