As readers of these pages know, the second quarter of 2005 was expected to be the most active 3-month period for raising shipping equity in history. The first quarter closed with the pricing of the Diana IPO, and everyone was set for lots of action – and then a funny thing happened: nothing.

March 30th rolled by and as we moved into the fabled 2Q05, no fresh deals came to market. There were a few filings made both confidentially and publicly, one as recently as this week, but no new deals have priced or gone on roadshows. At the same time, Diana stock crumbled below its offering price almost immediately, and Excel and DryShips share prices have deteriorated.

But now something really interesting has happened. News came out that B+H Ocean Carriers has hired Pareto to raise equity through an international offering, which excludes U.S. investors. The deal is not unlike the one that Pareto, which has proven itself to be the most powerful and hardest working firm of its kind in Oslo, did for Stolt Nielsen. It was Pareto, we believe, that orchestrated B+H’s recently purchase of 3 OBOs that are chartered to Sempra, one of which was done through a K/S fund.

So what does this mean? B+H is no stranger to Oslo. Although the company is based in Rhode Island, it has strong ties to Norway, with an office there run by Sverre Ditlev-Simonsen and most a large proportion of banking done with Nordea. But what is interesting about this deal is the fact that such an offering, using Reg F, may be a way for foreign private issuers to raise equity capital more quickly. Moreover, there are loads of capital in Europe looking for deals that are not U.S.

Another potential scenario is that B+H has found a strategic partner that wants a listing in the U.S. and seeks to accomplish this by acquiring a substantial, perhaps even a controlling, interest. If rumors of a $100 million offering are accurate, it would mean that Michael Hudner, who controls more than 75% of the company, would dilute his interest to below 50% as B+H currently has a market capitalization of about $95 million. The move has the potential to make a lot of sense for both parties, as B+H, even with more than half its EBITDA contracted for the next 12 months and beyond, has an older fleet that needs to be renewed.

Whether B+H is selling to financial or strategic investors, the increase in liquidity and dry powder for dealmaking can only be a huge positive for the company.

Having released phenomenal 1Q05 earnings, announced a massive $225 million stock buyback, held a swinging bank meeting in Vegas and closed a dirt cheap credit facility, Teekay is now ready to hit the road to sell a 20% interest in Teekay LNG Partners LP next week. With this confluence of events, there is little doubt that TK will be a strong performing investment. In an amended filing submitted yesterday, TK filled in a critical blank – the price range – which is $20-$22. Looking at projected EBITDA of about $100 million in 2005, the new deal will be priced at about 12x cash flow assuming middle-range pricing. There are about six shipping deals set to IPO in the coming weeks and having a blue chip deal like this kick off, even though it is an MLP and the others aren’t, will set a good tone. Here’s the line-up for the Teekay LNG deal: Citigroup; UBS Investment Bank; A.G. Edwards; Raymond James; Jefferies & Company, Inc.; Wachovia Securities and Deutsche Bank Securities.

Once again, we are going to draw you attention to our newest weekly feature, the Cash Flow Values by Vessel Type table, but this time we have done a little something to spice it up by going back to average one-year timecharter rates from 2002. Now of course comparing high market vessel values with low market rates is going to give some pretty scary looking multiples, but the reality is that the market could fall off next month. We do not believe that it will, but the far right-hand column brings into relief the downside risk taken by vessel purchasers, some of which are buying vessels at premium prices without long-term charters. So while a modern capesize bulk carrier at $72 million on a one-year timecharter at 3.2x free cash flow may look tempting, it is sobering to think that that same price could have been a 55.5x multiple of free cash flow in 2002.

Accounting and consulting network Moore Stephens International Limited is seeking to bring the meaning of the new International Financial Reporting Standards home to shipping companies. While Moore Stephens notes that the international nature of shipping business means that the industry’s international accounting standards are well developed as compared to many other industries, the firm also note that that does not mean shipping companies will not be affected.

In particular, assets held for sale will have to be classified separately, meaning that vessels that fit this description will not be depreciated. Residual values will have to be reconsidered annually, which could have a substantial effect on aging vessels where the remaining depreciation period is shorter. Moore Stephens partner David Chopping discussed these and other changes, also pointing out the impending inclusion with financial reports of remuneration for key management.

Hypovereinsbank yesterday held its 7th annual client dinner for the Norwegian markets at the scenic Holmenkollen Park Hotel. The dinner was well attended, with representation from ship-owners in Bergen, Oslo and Sandefjord, as well as from Aker Yards and other good clients.  During the dinner it was announced that they have increased their staff in Oslo by bringing Mr. Wolfgang Drescher from their Hamburg office to Oslo to support Ms. Susanne Mertens, who has been active there for the past three years. Mr. Drescher has been covering the bank’s marine equipment finance industry, which is one of the four products on which the bank focuses. Today, the bank offers services within ship finance, offshore finance, marine equipment finance and shipyard consulting. With Wolfgang’s 14 years of banking experience, he should be well equipped to service the Norwegian market.

London-based ship finance boutique Tufton Oceanic has hired Mr. Mas Gram, who started work last week. Mr. Gram, a Norwegian who recently received his MBA from Instituto de Empresa in Madrid and, spent three years with Tankers International, where he was a part of the starting team and ended up as marketing and project manager for the company. Mr. Gram will be working on deal execution for Tufton, and we wish him good luck.

Even while some hapless editorialists discuss fundamental differences in worldviews between Westerners, Easterners, and Middle Easterners, intrepid ship financiers are reassuringly setting out every day to prove that the international ship finance market knows no such bounds. And thank goodness for that. This week saw the completion of the first sukuk, or Shariah compliant, shipping bond deal. Abu Dhabi Commercial Bank, ABCIB Islamic Asset Management and ABC Islamic Bank acted as joint underwriters and placement agents on the deal, which was arranged for Al Safeena I Limited to refinance a VLCC on long-term charter to Vela International Marine.

While other Shariah compliant financing arrangements have been growing in popularity with some shipping financiers, notably NFC’s Al Rubban funds, this is the first done as a bond deal. We can only hope to see the trend continue, and Abu Dhabi Commercial Bank, for one, has expressed its interest in pursuing similar transactions in the future.

OMI has a new $320 million, 10-year facility in syndication, for which ING is acting as bookrunner, DnB NOR as agent, and NIB Capital, Deutsche Schiffsbank and Nordea as lead arrangers. The new facility, which is reported to be pricing at just 67.5 basis points over Libor, is set to replace an older $348 million facility on which OMI paid 125-150 basis points. However, market rumors suggest OMI has already paid down a significant portion of the older loan, meaning that this new one would provide the company with some significant free cash.

Freshly Minted understands that Eastern Drilling has mandated DnB NOR to underwrite a $275 million credit facility. The facility has six-year term and will be used for the construction of a new 6th generation semi-submersible drilling rig to be delivered in the fourth quarter of 2007 from Samsung. The contract includes an option for a second rig exercisable within 12 months of the signing of the first rig. The total cost of the rig being constructed is $550 million, and Norwegian investment bank First Securities has begun the book-building process of raising $238 million in equity and is proceeding with the listing in Oslo. Smedvig will also contribute $30 million (10% shareholding) to the company and be responsible for marketing and operations for 10 years.

BNP Paribas and Credit Suisse are helping Western Baltic bring its parent company, oil-trader Western Petroleum, into the newbuilding market with a $276 million long-term loan, which has also been syndicated out to Nordea, Calyon and Hypovereinsbank. On order by Western Petroleum are three 116,000 dwt vessels at Hyundai Heavy Industries and six ice-class 53,000 dwt products tankers at Hyundai Mipo said to cost around $350 million all together.