Articles

Earlier this month, Color Group AS successfully completed a new subordinated perpetual hybrid bond issue with an initial tranche of NOK 500 million and a borrowing limit of NOK 1 billion. With no specified maturity, the bonds have a first call date in December 2024 (4.25 years) after which there is an annual 5% step-up to incentivize redemption.

Based upon Triton International Limited's financing activities over the past three weeks, it appears that they have a license to print money. The timing was ripe. A recent jump in container lease demand and investment allowed Triton to conclude a substantial number of attractive new long-term lease transactions in the third quarter to date, and container pick-ups under these leases have driven its utilization to approximately 96.1% currently from 94.8% at June 30, 2020. To that end, the company was able to take advantage of the current attractive financing markets to support the recent jump in container lease demand and investment.

On Monday, Stolt-Nielsen Limited announced that its wholly-owned subsidiary, Stolt Tankers B.V., agreed to acquire five chemical tankers from Chemical Transportation Group ("CTG"), a company controlled by Peter Georgiopoulos, for trading in the Stolt Tankers Joint Service.

During July, GoodBulk Ltd. successfully closed its loan of $200 million to refinance the full amounts outstanding under five of its six existing facilities with an outstanding balance of approximately $200,881 as of June 30, 2020. The company started early with the old loans scheduled to mature between June 2022 and October 2023.

The Norwegian bond market came out of hibernation overnight in what turned out to be a feeding frenzy. Teekay LNG, Altera Shuttle Tankers, Navigator Gas, and Wallenius Wilhelmsen all announced transactions. Teekay was the first one out of the gate successfully closing a NOK 1 billion issue and was closely followed by Altera which successfully completed a $75 million tap issue in its senior unsecured green bonds.

The sale last week of the ADS Stratus by ADS Crude Carriers Plc for a price of $25.5 million piqued our interest.

Traditionally, we view transactions simply from the borrowers' perspective. Money is borrowed and repaid. Done and dusted. Except these deals also have a life on the lenders' balance sheets and must therefore be carefully managed for risk. There are general and specific reserves at the transaction level and capital ratios at the corporate level.

Although a small transaction, it is representative of investors' hunger for yield. Klaveness Combination Carriers came to market with a small tap issue, NOK 200 million, on Wednesday.

Back in September of last year, Hunter Tankers AS, a wholly-owned subsidiary of Hunter Group ASA, entered into a sale-and-leaseback transaction with SFL Corporation for three 300,000 DWT VLCCs, the Hunter Atla, the Hunter Saga, and the Hunter Laga, under construction at DSME in Korea. The vessels were delivered last year on September 24th, October 21st and November 1st respectively to SFL and immediately commenced five-year bareboat charters to Hunter with purchase options during the charter period.

These are the small cap shipping companies, while not forgotten, unfortunately receive less attention these days. Unlike the larger cap brethren which can more easily refinance loans and generate liquidity, their solution is more short term and simply involves deferrals of principal.

Last week, Bonheur ASA successfully completed a new senior unsecured green bond issue of NOK 700million maturing in September 2025. Oversubscribed, the bonds were priced at three-month NIBOR + 275 bps and may be tapped up to a maximum amount of NOK 1 billion.

While no discounts or promotions were involved, Klaveness Combination Carriers ASA's tap offering was here and gone in a flash. Last week, Klaveness successfully completed a NOK 200 million tap issue of its existing senior unsecured bonds maturing in February 2025.

Last week in its first public issuance since taking on its new name, Altera Shuttle Tankers L.L.C. ("AST") successfully concluded a $75 million tap issue of its Senior Unsecured Green Bonds due in October 2024.

A convertible bond is a beautiful thing. It carries a discounted interest coupon with a conversion premium. If not converted, the coupon, a relative bargain, is the price and, if converted, share dilution is the cost. Both are affordable.

Last week, CIT announced that its maritime finance business concluded a $28 million financing for Valloeby Shipping Ltd., a company owned by a fund managed by MHR Fund Management LLC.

This week we head again to Oslo but not to the bond market; instead, we deviate to what seems to us to be the re-opening of another Norwegian specialty market — the project business.

Back at the end of August, Navigator Holdings Ltd. successfully completed the issuance of $100 million of new senior unsecured bonds in the Nordic bond market. Maturing in September 2025, the new bonds will have a fixed coupon of 8.00% and a borrowing limit of $150 million.

Last week, Wallenius Wilhelmsen ASA ("WalWil") successfully completed a new NOK 2,000 million senior unsecured bond issue with the margin set at three-month NIBOR plus 5.75 %, the tight end of initial price talk of +575-600 bps, with a maturity date of September 9, 2024.

Last week, Ocean Yield ASA announced that it agreed to sell its equity interest in the SBM Installer, a diving support and construction vessel owned by OS Installer Limited, a joint venture owned 75% by Ocean Yield and 25% by SBM Holding Inc. S.A. and employed on a long-term charter to SBM.

The news was not good, but the logic was compelling and the result inevitable. Last week, ABN AMRO announced that its executive board has decided that going forward Corporate & Institutional Banking ("CIB") will focus on clients in Northwest Europe and Clearing, which will retain its global presence, and will exit all non-European corporate banking activities. Consequently, the corporate banking presence in the United States, Asia, Australia, and Brazil will be wound down.