BLUEWATER HIGH YIELD: THE NEXT BIG THING?

In recent years High Yield in marine finance has not had a good reputation. This is not because that the idea of the instrument is a bad one, but that the idea was often matched with projects and business plans not well suited for the instrument. The Enterprises, Holt, Millennium, Global Ocean and Golden Ocean debacles all had positive and negative aspects to them from their starts in the late 1990′s and both the investors and the companies alike ended up in messy situations in the end. Since then, the door has been shut on marine, and shipping specific, High Yield issues.

That’s why when, back in December, we heard about Bluewater Finance Ltd (Bluewater) coming to market in January with a possible $200m bond offering, we anticipated the red herring with baited breath. Would it be any different this time? Our initial thoughts were, possibly, yes. The main difference is that Bluewater is not a shipping company, per se. It is a designer, developer, and owner of FPSO’s (five under contract, three owned) and multiple SPMs whose major clients include long-term relationships with oil majors (See “Guts of the Deal”). It is also interesting for the tanker market because Bluewater potentially is a consumer of second-hand VLCCs and more FPSO operations can mean more tanker trips.

This is only an excerpt of BLUEWATER HIGH YIELD: THE NEXT BIG THING?

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