Finance the Cruise Industry: Of Youth and Asia

Apart from Chris Hayman of Seatrade, Michael Parker of Citibank and Malcolm Willingale of V. Ships, I would venture to guess that I was the only individual fortunate enough to attend both the Seatrade Tanker Conference in London and the Seatrade Cruise Conference in Miami in the past month. While the traveling schedule has indeed gotten me into a bit of hot water at home, it has allowed me to come to the firsthand conclusion that the two events could not have been more different.

In short, if weather is thought to reflect mood, then London was as rainy as Miami was sunny. Dreary discussions of declining world scale rates heard in London were replaced by the dreamy ideas of European architects, including “Cruise Bowl”, a floating structure the size of the Louisiana Super Dome. Questions on who has gotten ISM qualifications gave way to queries of whether to have steel drum bands greet tourists on the quay on the deck.
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Revisiting B+H Equimar: The Importance of Being Flexible

In the summer we invited the guests. In the autumn we cooked the meal, and now everyone is sitting down to eat” says Michael Hudner in a recent article in Tradewinds. The occasion for this festive language is B+H Equimar’s announcement that it had successfully invested $92 million of which $88 million were the proceeds available for acquisition from its high yield offering this summer, thereby meeting its self-imposed forecasted investment schedule. We thought it would be an appropriate time to revisit the deal.
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High Yield – A Few (Choice) Remarks

By John Blankley, Chief Financial Officer, Hvide Marine

John Blankley called us during Hvide’s recent roadshow to offer some comments on the state of the US capital markets and high-yield in particular. John is no stranger to the capital markets and we think you will find is remarks insightful. He has just recently raised $300 million of high yield notes for Hvide Marine and is a Director of MC Shipping which is raising $100 million more. Both deals are lead managed by Donaldson Lufkin & Jenrette. Over the span of his career, John has raised $400 million of equity, about $1 billion of public bonds and another $1 billion of private placement and bank debt.
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Alpha Shipping: Our Most Recent Watershed Event

by Alan Ginsberg

Last month’s $175 million offering of ten-year senior notes by Economou family-controlled Alpha Shipping plc is the shipping industry’s most recent watershed event with respect to the high yield financial markets. Barely a month goes by without some members of the shipping community expressing continued astonishment over when and what owners are bringing to market and how they are being received. We say “wake up and smell the salt air.” In our opinion, high yield has become nothing less than a structural component of ship finance. Continue Reading

The Importance of Being Earnest

In a perfect world, shipping companies would make proactive statements to their investors about how challenging world events and difficult markets will affect their businesses. While few would disagree that such a dialogue would be of mutual benefit to both sides, at present that scenario is more of the exception than the rule. Below we have included one such “exceptional” statement which distributed recently by Khalid Hashim of Precious Shipping. While many of you know Mr. Hashim, or are at least aware of his commitment to demystifying his Company’s activities, we have included it for those of you who do not. We hope that you will find his remarks and candor as impressive and valuable as we do.
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Will I-Banks Keep Kissing Toads in Dry Bulk Market Slump?

One of the most regular criticisms we hear about the current junk bond frenzy is that investment banks aren’t committed to shipping companies the way that commercial banks are. Those who are wary proclaim that investment banks are fair weather friends to the shipping industry, and when things turn ugly and fees have already been generated, investment banks will cut and run to another industry with slightly less capital markets sophistication and brighter prospects. While only time will tell the answer to that question, with the Biffex having plunged through the 1000, it seems that the time may be upon us, at least with respect to dry owner who wants to issue junk bonds. Where it leaves companies like OSG, which is trying to sell off Panamax tonnage in this currently anemic market, is another question altogether. Continue Reading

When 8 = 6: Consolidating Accountants

The liner industry is not the only one consolidating these days. The multinational accounting firms which used to call themselves the “Big Eight” consolidated a few years back to the “Big Six” and, with the recently announced mergers of KPMG Peat Marwick with Ernst & Young and Coopers & Lybrand with Price Waterhouse, most likely will now refer to themselves as the “Big Four.” We thought it would be interesting to take an unscientific look at how the mergers might impact the shipping industry, if at all. Continue Reading

Wooing Wall Street, From Abroad

If the historically torrid relationship between the shipping industry and investors can be soothed through more regular dialogue, then a recently promulgated Securities and Exchange Commission regulation may help shipping companies get a first date.

Specifically, the SEC announced that it has adopted a regulation which creates a “safe harbor” to ensure that US press will have access to foreign issuers who discuss an offering of securities. Continue Reading

What Makes Tanker Stocks (Up) Tick?

The more the shipping industry ingratiates itself with the capital markets, the more opportunity will be created for those who have insights on the relationship between the two often far-removed worlds. Continue Reading

Spill Response: Running Fast to Stand Still

Imagine your office on most any day. Now imagine 300-plus people rushing in to contend with an unfolding incident, the specifics of which are frustratingly vague. Can you see the miles of boom, the skimmers, the all terrain vehicles ferrying HAZMAT-clothed engineers along the shore, and the heat sensor satellite images projecting the landfall taped to a wall? Now imagine you are paying for all those people and all that equipment. What is more, how they perform might well dictate your future.

When a spill occurs, the response needs to be swift and well coordinated.

The simple fact is that a spill of any significance in North America, if not the world, will change your life – today, tomorrow, and for months and maybe years to come. Within hours, you will have hundreds of “new employees” – many of whom will not know who you are. Complicating matters more are the many interests at work, not all of them yours. Continue Reading