Articles

We are extremely grateful for Angeliki Frangou’s insight in linking the fortunes of the tanker sector during her interview with Clarksons’ Omar Nokta at our 2021 Greek Ship Finance Forum last week.

On October 1, 2021, Eagle Bulk Ultraco LLC, a wholly owned subsidiary of Eagle Bulk Shipping Inc. (“Eagle”), entered into a new five-year senior secured credit facility in the amount of $400.0 million, which consists of a $300 million term loan and a revolving credit facility of $100.0 million. Subject to certain conditions, Eagle Ultraco may request an increase of up to $60.0 million in the aggregate principal amount of the Term Facility Loan.

Ships are assets on many levels. First and foremost, they produce revenue through trading, but as a derivative of an improving market or a strategy of low gearing, they can also be a source of incremental liquidity. A CFO never has enough cards to play.

Having successfully concluded its IPO back in May, Taylor Maritime Investments Limited (“TMI”) quickly returned to the market placing new shares to fund its acquisition pipeline, which according to its IPO prospectus, is estimated to be a total deal value of $500 million based upon executable deals within the next 12 months or less.

Another Fredriksen company has been busy as of late. With the resolution of the Seadrill obligations, SFL Corporation was back doing what it does best, wheeling and dealing but of course all on the up and up. It was a very busy month for the team.

Last week, Capital Product Partners L.P. announced that its wholly owned subsidiary, CPLP Shipping Holdings PLC, successfully priced its offering of €150 million of five-year unsecured bonds in Greece. Guaranteed by CPLP, the Bonds will have a coupon of 2.65%, which was at the tight end of initial price talk, due to strong demand.

Seemingly, more important than ever, the common mantra of all CFOs these days is the need to diversify one’s funding sources. This was the impetus behind Dampskibsselskabet NORDEN A/S’ (“NORDEN”) issuance of an initial $100 million of senior unsecured bonds to institutional investors back in June with the ability to increase the amount to $150 million.

Private equity apparently sees greater opportunity in energy infrastructure than the public markets or at least is willing to pay for it. Just recently, GasLog Ltd. closed its take private transaction with the private equity firm, BlackRock Global Energy and Power Infrastructure Team.

Numeracy is not one of our strengths, but the numbers incorporated in the article’s title struck a chord. The first number represents the number of newbuilding containerships Seaspan Corporation has ordered since December 2020 and the second the total TEU capacity of those vessels.

One of the greatest competitive advantages a company can have is ready access to competitively priced capital and that’s where John Fredriksen comes in. Back in February, Golden Ocean Group Limited entered into agreements to acquire 15 modern dry bulk vessels and three newbuildings for a total consideration of $752 million (the “Vessel Acquisitions”) from affiliates of Hemen Holding Ltd., the company’s largest shareholder.

On Tuesday, International Seaways, Inc. announced that it has entered into attractively structured sale-leaseback agreements with Ocean Yield ASA for the refinancing of six VLCCs in the aggregate amount of $375 million. VesselsValue appraises the vessels for $387.8 million implying very high gearing, which, in turn, reflects the vessels’ average age of 5.5 years, and the imputed value of the Tankers International Pool.

The supply chain problems are well known. There is no limit to the litany of reasons behind it. These include consumer online purchasing, a lack of truck drivers, a lack of space to store containers, a shortage of containers in China, and so on.

While container shipping has grabbed all the headlines, the dry bulk market continues to steadily outperform in the background. Being out of the spotlight, the sector affords careful investors distinct profitable opportunities as evidenced in Pareto Securities Project Financing’s latest project offering, Parbulkers II AS (“Parbulkers”).

Although interest rates have experienced a slight upward rise this week, they remain at near historic lows. The Fed will begin to taper this year but has pushed off rate increase until next year. Investor appetite for yield remains strong.

When one exits, another enters. Last Wednesday, Western Bulk Chartering AS successfully concluded a private placement of 4.34 million of its shares at NOK 30 per share for a total deal size of NOK 130.2 million (~$15 million). The offering was comprised of a primary offering of 3.95 million new shares which raised gross proceeds of NOK 118.5 million and 390,000 over-allocated additional shares representing NOK 11.7 million.

For those investors who are less than enamored with Diana Shipping’s conservative chartering strategy of fixing its vessels on medium- and/or long-term charters, the company has created an alternative by effecting the spin-off of three older dry bulk vessels into a new subsidiary, OceanPal Inc., which will deploy those vessels instead in the spot charter market to exploit today’s strong market.

Last week, Golar LNG Limited (“GLNG”) successfully placed $300 million of its senior unsecured bonds in the Nordic bond market on the back of strong interest from yield hungry investors. Maturing in October 2025, the bonds will carry a coupon of 7.00 percent.

At the recent Marine Money Climate Week conference held during the UN global gathering in NYC, Mr. Cummins, President of BSMC, shared a stage with Guy Platton head of the International Chamber of shipping and Johannah Christensen, CEO of the Global Maritime Forum (GMF) in a show of collaborative ambition for the industry’s decarbonization efforts.

Having disposed of its tanker fleet in a merger with Diamond S Shipping back in 2019, Capital Product Partners L.P. (“CPLP”) is today in an enviable position owning a fleet of 16 vessels, including 12 Neo-Panamax container vessels, three Panamax container vessels and one Capesize bulk carrier.

Last month, Hemen Holding Limited, a company affiliated with John Fredriksen, acquired additional shares in Avance Gas Holding Ltd which brought its aggregate shareholding, including shares controlled by its affiliate Frontline Ltd, to 25,825,615 shares equaling 33.35% of the shares outstanding thereby triggering a mandatory offer obligation under the Norwegian Securities Trading Act.