Blowout!

As a seasoned issuer, Teekay Corporation wasted no in pricing what was expected to be $300 million of senior unsecured notes due in 2020. On Friday, not only did they announce highly competitive pricing, but also that the offering had been upsized by 50% to $450 million.

With a coupon of 8.5%, the deal was priced at 99.181% to yield 8.625% or 492 bps over like term Treasuries. Details of the transaction are shown in the Guts of the Deal below.

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Shipbuilding Capacity at the Opening of a New Decade – Where Are We?

By Worldyards

We at Worldyards pride ourselves in having relatively accurate (yes, everything is relative) measures on both shipbuilding capacity and size of the orderbook, therefore we think it is appropriate to end 2009 with our final public market comment on capacity. We discussed this issue in numerous occasions in the past (see, Reality Check – 3 years on dated 18 March 2008), at most times throwing cold water into various supply-side scares such as massive delays, lack of main engine and crankshafts etc.. We do naturally track the numerous delays and failures of some shipyards before they cut the first steel. Such misfires have been part and parcel of the shipbuilding landscape for many years. Our capacity figures represent fact-based tracking of all expansions and productivity increases. These measures to record shipyard facility capacity are combined with a detailed tracking of orderbook progress to indentify instances where the contracted orderbook will fall short of projections due to either shipbuilder default (construction delays) or else buyer problems (that result in either outright default on contract or a hard-fought-for mutual agreement to terminate or reschedule). Continue Reading

Hoe Leong Moves Into Tanker Business

Singapore listed spare parts distributor Hoe Leong Corporation (“Hoe Leong”) is acquiring a 49% equity interest in the tanker business of Sumatec Resources (“Sumatec”), a Malaysia listed oil and gas service provider. A new company will be established to acquire the entire share capital of Sumatec’s tanker operating and owning subsidiaries (Semado Maritime, Semua Shipping, Semua Chemical Shipping and Mini Tanker Chartering or collectively, the “Semua Group”). Following the acquisition, Hoe Leong, Sumatec and a private investment holding company Grand Columbia Holdings will each own 49%, 38% and 13% in the new entity. Continue Reading

Yang Ming Wants Public Debt

Last Friday, Taiwanese boxship operator Yang Ming Marine Transport announced plans to issue up to TWD 5 billion (USD 157 million) worth of secured corporate bonds. The bonds will carry a fixed coupon rate with a maturity period of not more than 5 years. Proceeds will be used to repay existing debt. A listing of Yang Ming’s dry bulk subsidiary Kuang Ming Marine Transport is also on the cards. Continue Reading

STX Group Mulls China Listing

STX Group is paving the way for a potential listing of its shipbuilding units in China. The new holding company STX Dalian Holdings will take control of STX Dalian Shipbuilding, STX Dalian Heavy Industries and STXDalian Marine Engineering, with plans of an eventual listing either in Shanghai or Hong Kong in 2011. Last year, STX Dalian Shipbuilding secured a 9 year loan of RM 2.85 billion (USD 417 million) from China Construction bank and another unnamed Chinese bank at 6.14%. Continue Reading

Citi and China Exim Support Toisa

While we are still on the subject of Chinese banks’ strong support for domestic shipyards, China Exim Bank has joined hands with Citigroup to provide offshore owner Toisa limited with a structuring financing solution of up to 10 years. USD 127 million of debt will be used to finance three anchor handling tug supply vessels (AHTS) and one platform supply vessel (PSV) ordered at Wuchang Shipyards. Wuchang Shipyards is one of the key shipbuilding units under the state-owned shipbuilder China Shipbuilding Industrial Corporation. Continue Reading

Bank of China in Action Again, What’s New

Bank of China has extended a USD 179.55 million buyer’s credit facility to STX Pan Ocean recently in relation to the South Korean shipper’s acquisition of three 17,600 DWT bulkers ordered at Jiangsu New Century Shipyard. Jiangsu New Century Shipyard is one of the largest private shipbuilding groups in China who has built over 100 ships for owners in Denmark, United Kingdom, Germany and Italy. This successful transaction was initiated by Bank of China’s branch in Jiangsu province, upon news of STX Pan Ocean’s difficulty in securing finance for the ships. This year, STX Pan Ocean has earmarked USD 203 million to invest in 6 vessels. Continue Reading

KDB Let’s Together Fund Finds Interest

Bank of Nova Scotia Asia and its syndicate of lenders have recently participated in Korea Development Bank’s shipping program. This is the first transaction effected under KDB Let’s Get Together Program, designed to enhance the liquidity of Korean shipping companies. Continue Reading

NYMAR Live from the NYSE.

The new year’s first serious shipping gathering in NY took place under the aegis of the NY Maritime Association at the New York Stock Exchange.  It was an animated audience that filled the Stock Exchange’s stately hall, though we noted the Exchange’s head of events was relieved that unlike Marine Money Week in 2008 he did not have to contend with 150 more guests than NY City fire codes allowed.

Peter Shaerf, AMA Capital partner and President of NYMAR welcomed the crowd and Bob Gruendel, Partner at DLA Piper brought us to the point of Gazing into the Future through the Crystal Ball and wisely at that point turned to Peter Georgiopoulos, Chairman of Genmar, Genco and Aegean, Duncan Neiderauer, NYSE, CEO and Harvey Pitt currently CEO of Kalorama Partners, but former Head of the US Securities and Exchange Commission.

The following is a short summary paraphrasing the comments, note paraphrasing:
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Watch the Short Interest

In an article entitled “Contrarian Investor Sees Economic Crash in China,” published last week in the New York Times, reporter David Barboza describes James Chanos’ negative views on the China economy. Mr. Chanos is a renowned hedge fund investor who made his fortune through short selling and China is his latest target. Unlike the conventional wisdom, Mr. Chanos believes “that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict.”
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