Articles

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.

Having received a second bite of the apple, Danaos Corporation clearly learned the importance of moderation when it comes to leverage and took that lesson to heart. As shown in the graph below, the company reduced its net debt from $2.27 billion in 2015 to $0.4 billion as of Q3 2022, a reduction of $1.9 billion.

Having experienced a near death experience a few years back, Teekay Tankers became focused, some might say obsessively, on repairing/strengthening its balance sheet and improving liquidity. Within that short time frame, the company has completed a remarkable turnaround.

Having put out a deal structure earlier this month for a new bond deal for Bluewater Holding B.V. (“Bluewater”), the company’s bankers soon discovered that investors were not quite on board with the suggested terms leaving a gap to be bridged to achieve the necessary meeting of the minds.

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.

Last week, Cool Company Ltd. (“CoolCo”) successfully concluded a transaction to acquire four modern LNG carriers, Kool Orca, Kool Firn, Kool Boreas, and Kool Baltic, from Eastern Pacific Shipping (“EPS”), the company’s majority shareholder, for a purchase price of approximately $660 million.

In addition to its primary focus on its operating businesses, the management of Atlas Corp. is seemingly equally devoted to another priority – balance sheet optimization. Understanding a right-sized balance sheet provides a base for growth and stability, management carefully manages leverage and liquidity with verve.

To say the management of Dorian LPG is both cautious and disciplined would be an understatement. Over the last few years, the company’s capital allocation policy was unswerving and involved carefully reinvesting, paying down and refinancing debt and returning capital to shareholders through share buybacks.

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.

Those of us involved in shipping live in a bifurcated universe these days. The world has moved on from the pandemic but struggles with its aftereffects. Today, the world struggles with inflation, high interest rates, a potential recession, a slowing Chinese economy, and the geopolitics of the war in Ukraine. Could the picture be gloomier?

Teekay Corporation last week announced that Vince Lok would retire from his position as Executive Vice President and Chief Financial Officer effective January 1, 2023, after nearly 30 years with the company, including the past 16 years as Teekay’s Group CFO.

Continuing the process of deleveraging its balance sheet, Scorpio Tankers Inc. last week announced that it will exercise the purchase options on eight ships and repay a credit facility.

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.

When you pull together one of the largest mixed fleets in the industry (185 vessels), there is much work to be done and for Navios Maritime Partners this quarter was no exception. The company continued the process of renewing its fleet by acquiring two 115,000 DWT Aframax/LR2 newbuildings for $125.2 million and one newbuilding Capesize bulk carrier and one Kamsarmax for an en bloc price of $91.3 million.

Good shipping markets tend to tip the scale of capital allocation policies towards dividends, particularly when bolstered by a positive supply side story highlighted by few slots and expensive newbuilding prices. How long these conditions will last is always a question.

Societe Generale’s Paul Taylor is a very busy man. His day job involves expanding the scope of the bank's Maritime Industries business. But his public persona seems to be singularly focused on helping the shipping industry save the environment through his leadership role, together with Citi’s Michael Parker of the Poseidon Principles with its decarbonization goals

Formed in 1982, Bibby Financial Services (“BFS”) is a financier of small- and medium-sized enterprises (“SME”). The company provides specialist and adaptable trade, asset and working capital finance, FX and insurance services helping businesses to grow in domestic and international markets.