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Syndicated Market Continues on Track
Last Friday, Dealogic released its Bookrunner and MLA Tables for Syndicated Marine Finance Loans for 2011 showing total syndicated loan volume at $68.4 billion up from last year’s $50.1 billion. From the macro perspective the trend remains upward as deal volume and number of transactions grew respectively 26.2% and 19.6% compared to the year earlier. This continues the growth which commenced in 2009. Ignoring the boom in volume in 2007 and 2008, the current volume is on par with the years prior. A further measure of the health of the syndication market is also reflected in the nominal reduction of club deal volume as well as the declining proportion of these deals versus total syndicated volume. This is best seen pictorially in the graphs below.
AMA Gains Toehold in Germany – Acquires 49.9% of Lloyd Fonds
In our catch-up last week, we missed the news that Lloyd Fonds AG had successfully completed its equity issue with full subscription rights. In an offer that was underwritten by AMA Capital Partners, a total of EUR 14.7 million was raised based upon the issuance of 14.7 million new shares priced at EUR 1.00 each. AMA subscribed to 13.7 million shares with the existing shareholders acquiring the balance. As a consequence AMA holds a 49.9% interest in the company which will expand its supervisory board to six members of which three will be nominated by AMA. Of the total proceeds EUR 10 million will be used to settle its contingent liabilities towards the banks likely resulting from pre-delivery equity financings. AMA is now an insider giving them a leg-up over their competitors in getting a first look at opportunities in Hamburg.
New Odfjell Terminal Joint Venture in China
Continuing its focus on the terminal business, Odfjell SE announced on Wednesday its agreement to enter into a joint venture with Tianjin Economic-Technology Development Area (“TEDA”) to develop a terminal and marine facilities for bulk liquid chemicals, petroleum products and gases in the Nangang Industrial Zone (Tianjin) in China.
Diana Containerships’ Sale-leaseback with APL
On Monday, Diana Containerships Inc. announced that they had purchased the M/V APL Sardonyx and the M/V APL Spinel, both with a capacity of approximately 4,750 TEUs, for $30 million each. The vessels were built in 1995 and 1996 respectively at Samsung Heavy Industries. Delivery of the vessels is expected to take place this quarter.
Restis Steps Up and Banks Cooperate – Seanergy Amends Facilities
On Monday, Seanergy Maritime Holdings Corp. announced that two of its lenders had agreed in principal to waive certain financial covenants in three of its loan facilities and to amend the terms of two of its facilities. Giving comfort to the lenders was the main shareholder’s decision to inject $10 million of new equity.
Rewarding Shareholders – Seaspan’s Tender Offer
Today, Seaspan Corporation announced the preliminary results of its tender offer which expired yesterday, for the purchase of up to 10 million of its Class A common shares at $15/share. Not surprisingly, given the premium offered, the offer was a huge success with 21.3 million shares tendered. Based upon the terms of the offer, which gives Seaspan the right to increase the number of shares purchased by 2%, the company expects to purchase 11.3 million shares for a cash outlay of $169.5 million. The acquisition of the 11.3 million shares, which represents approximately 16% of the common shares outstanding, will reduce the share count to 58,367,460 shares. As a consequence of the oversubscription, the company expects purchase the shares from each tenderer on a prorated basis, which is estimated to be 53%. Citigroup acted as dealer manager of the tender offer.
Shaking It Up
By George Weltman
This year’s group of participants in our annual shipping rankings was shaken not stirred. Through both action and inaction, our grouping was radically reduced this year from 100 participants last year to 88 this year. Accounting for most of the decline was a delay in filling year-end financials. While we delayed running the rankings model to the last possible moment, we still ended up missing Euroseas, Gulf Navigation, MISC, PT Berlian Laju Tanker, Sinotrans, Omega Navigation, Stealth Gas and NewLead Holdings. Absence does make the heart grow fonder and we hope to see their return next year.
In other changes, Platinum Equity took American Commercial Lines private and re-named it Commercial Barge Lines. As a consequence, it fell off our list and we replaced it with Seanergy Maritime Holdings. For some unforgivable reason that company, which had its roots as a blank check company, fell below our radar and should have been part of the rankings since 2009, its first full year of operations. We apologize to Mr. Ploughman and Ms. Anagnostara for the omission and hope its inclusion this year and going forward makes up for it.
Citi and CICC for SITC in Hong Kong – IPO Award East
By Rodricks Wong
In the aftermath of the financial crisis in America, there was the formation of something of an “America Inc.” as firms from AIG to General Motors were bailed out by the government. The was highly controversial among Americans, as it was across the Atlantic in Europe. For much of the world, though, the concept of a business economy that is closely integrated with the state is more widely accepted and extends even to notoriously roguish shipping lines. China Inc. may include COSCO and CSCL, Japan Inc. the likes of NYK and MOL, the list goes on.
As such these companies are quite a lot less roguish than many of their counterparts, and also benefit from implicit state guarantees. This make their access to capital in the domestic market extremely competitive. This can be seen as virtues or vices depending on your perspective. While it encourages a certain higher level of responsibility, at the same time it tends to discourage more competition in the market as older players are universally preferred to and favored over new players. This has the unintended consequence of stifling competition and allowing established players to become less competitive as they enjoy unparalleled access to finance and new business.
The Story that Does Not Stop
In yesterday’s Markit North America Intraday Alert – Snapshot, Otis Casey reminded us that a new year does not always bring changes:
“Additionally on the banking side, concerns about liquidity and the need for recapitalization in the European financial system weighed on sentiment. News that the ECB’s overnight lending facility was tapped for EUR 15 bln along with record amounts in the deposit facility sparked concerns over liquidity. Reports that UniCredit floated an equity issue that would yield a discount of 43% less than yesterday’s closing price, excluding the value of rights, prompted speculation that many European banks would need to raise equity and provide similar discounts.”
A dysfunctional interbank market and unresolved capital issues are not a welcome start to the year.
Welcome to Brazil, Mr. Fredriksen
Given the growing opportunities in Brazil, it is not surprising that Seadrill Limited would seek the advantages of a local presence in country. Back in early December, Seadrill announced that its wholly owned indirect subsidiary, Seabras Servicos de Petroleo S.A. made an initial filing of a Reference Form with the Brazilian Securities and Exchange Commission in connection with a potential initial public offering of its shares on the Nova Mercado segment of the Sao Paulo Stock Exchange. Naturally any offering would be subject to market conditions and the approval and the registration of the shares by the Brazilian authorities.
The Official Guide To Marine Finance Providers
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