Aframax Fever?

While the syndicated lending market continues to limp along with margins widening and originators cautious about closing deals until allocations are firmly committed, we are beginning to see stronger owners lining up capital in preparation for making strategic acquisitions.

The biggest, and we think most noteworthy, transaction presently in the market involves Bona Shipholding and highlights the importance of relationships, for shipowners, originators and debt providers. It is our understanding that Bona is close to closing on two tranches of ten-year revolving facilities totaling $500 million put together by Chase and Citibank. A look at Bona’s balance sheet reveals that the company has only $355.9 million in total debt, so even if the facility is used to refinance all its debt, it will leave Bona with approximately $144 million in cash for future acquisitions.

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