Deal of the Year – 2002 Restructuring

In Marine Money’s Own Words… “In a breathtaking example of a lofty initial yield, bond swapping and some last minute window dressing triumphing over simple arithmetic, Millenium Seacarriers was priced to yield 12.75% with an equity kicker of 5% thrown in for good measure. With an overvalued fleet, a plethora of fees, significant forward chartering risk, a dozen break-even charters and an oddball fleet that is moving awkwardly from advanced middle age into retirement, it’s time for investors to strap on their seat belts and get ready for the ride.” Marine Money, August 1998

You got to know when to hold ‘em, know when to fold ‘em, know when to walk away, know when to run.” These words, sung by the legendary Kenny Rogers and written by Lionel Ritchie, are a startlingly accurate description of restructuring shipping deals. As the country ballad suggests, there is no single blueprint for achieving a successful restructuring. What you do depends on cards you’ve been dealt.

This year’s Restructuring Award goes American Marine Advisors of New York for their role in two very different deals– deals that we think typify AMA’s ability to engage in a dirtunder-the-fingernails dogfight and also execute the disposal of a business franchise. In our view, it is this combination of skills that has allowed the merchant bank to earn its dominant role in this critical niche. So long as the maritime industry remains highly leveraged and volatile, restructurings will occur and AMA has proven itself to be a “first call” for stakeholders in deals that go bad.

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