Articles

Richard Smith explains the opportunity.

A profitable year led to more M&A, and less equity and debt financing.

Evercore’s Jon Chappell recently published a note on his most recent conversation with Gene Seroka, the Head of the Port of Los Angeles, which reported on the status of the ongoing labor negotiations at the West Coast ports, improvements in supply chain bottlenecks, and general shipper confidence.

Last week, Navigator Holdings Ltd. (“Navigator”) announced that its subsidiaries, Navigator Centauri L.L.C., Navigator Ceres L.L.C., Navigator Ceto L.L.C., Navigator Copernico L.L.C. and Navigator Umbrio L.L.C. (the “Borrowers”) entered into a six-year secured term loan and revolving credit facility, with Crédit Agricole CIB and Deutsche Bank.

Not to be left out, Frontline Ltd. was actively refinancing near-term debt maturities. In July and October 2022, the company entered into two senior secured term loan facilities for a total amount of up to $287.2 million to refinance two existing term loan facilities with total balloon payments of $267.1 million maturing in the first quarter of 2023.

If you love numbers and charts, Campbell Houston has every conceivable kind.

One of the last steps needed to be taken to finalize the take private transaction of Atlas Corp by Poseidon Acquisition Corp. is to obtain the consent of the bondholders of the 6.5% Seaspan Corporation Sustainability-Linked Senior Unsecured Bonds due in 2026 to amend the bond terms to remove the de-listing covenant which would trigger a put option at 101 percent.

Back in October, the Chairman of Global Ship Lease, Inc. (“GSL”) issued a plea to its shareholders seeking their participation in the company’s annual general meeting, a requirement under the laws of its incorporation.

For every change, there are consequences and often complications. For Seaspan Corporation, it was the announcement by its parent, Atlas Corporation, of its intention to take the company private. Back in April 2021, Seaspan issued $300 million of 6.5% Senior Unsecured Sustainability Linked Bonds due in 2026.

We are extremely fortunate to have a good friend in Oslo who works in DCM for a Norwegian bank and is therefore well placed to provide insights into the Norwegian capital markets, and more specifically the Norwegian bond market.

From the Deal Tables….

Last week, d’Amico International Shipping S.A. announced that it exercised its purchase option under the existing bareboat charter with a Japanese counterparty for the MT High Voyager for consideration of $20.8 million. The High Voyager is a 45,999-dwt eco-design medium-range product tanker, built in November 2014 at Hyundai Mipo, South Korea.

In August 2022, Avance Gas Holding Ltd. finalized the financing of its newbuilding program. As the final piece, the company signed a $135 million sale-leaseback agreement with BoComm Leasing for the financing of newbuildings five and six, the Avance Castor and Avance Pollux, which are scheduled for delivery in Q4 2023 and Q1 2024, respectively.

Last week, Danaos Corporation announced that it expects to repurchase $37.234 million of its $300 million 8.500% unsecured senior notes due 2028 (“Senior Notes”) in a privately negotiated transaction.

The process of debt optimization continues apace at Flex LNG, as management continues to squeeze the balance sheet for what seems to be a limitless source of liquidity.

It was yet another year of unexpected events in the shipping and ship finance markets.

Back in October, the Office of Foreign Assets Control (“OFAC”) designated Amsterdam Trade Bank (“ATB”) as a Specially Designated National (“SDN”).

Last week, Golar LNG Limited (“Golar”) announced an offer to buy-back a portion of its $300 million 7% senior unsecured bonds maturing in October 2025.

With an equity ratio of 31% and $122 million in cash, Ocean Yield ended the quarter with a strong balance sheet. The work, however, never ceases as the company announced, after the quarter end, the refinancing of several loan facilities, which were structured to maximize flexibility, resulting in additional available liquidity of $90 million.

With a fleet of 128 vessels, Star Bulk Carriers Corp. must, out of necessity, regularly optimize its capital structure. Since the beginning of the year, the company has completed $402.6 million of refinancings, reducing its annual interest cost by $4.9 million, from more competitive margins, and its annual debt payments by $12 million, while extending the average maturity of its outstanding facilities from 3.6 to 4.5 years.