MC Shipping: Casualty of the High Yield Glut

by Alan Ginsberg

When MC Shipping successfully raised $100 million in ten-year Senior Notes last month, it marked another shipping milestone: it is the most recent of the late-80′s, publicly-traded shipping funds turned perpetual companies to tap into the high yield market. Like B+H and Global Ocean before it, these companies were pretty much given up for dead by investors and analysts. By and large, the operating performance of these closely-held, thinly-traded companies could easily lead one to believe that they had been kept alive for the steady stream of management fees and chartering/sales commissions which they generated for affiliates of their respective principal shareholders. It is worth pointing out that MC Shipping’s 1994 common stock rights offering was the only previous attempt by any these companies to grow out of their old fleets.

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