MID-TERM PERSPECTIVE FROM A HIGH YIELD ISSUER

by Vassilis E. Kertsikoff, Chief Financial Officer, ELETSON CORPORATION
Delivered to the Ship Finance Forum at The Palace Hotel in New York City on June 23rd.

What brings me here today is very simple: Eletson was only second after Teekay (a company I will also refer back to later) to tap the high yield market in the fall of 1993. November 1998 exactly marks the mid term point of this financing, a fact which gives us a unique perspective and makes us bona fide qualified to talk about our experience. That’s indeed what I’m here to share with you today – the past, what has happened in the interim and some glimpses of the future intertwined with some words of caution.

As of late shipping seems to have found in high yield the goose with the golden egg. To those professing that high yield is not as important in the grand scheme of things, I would suggest visiting Piraeus for a few days. I can tell you high yield today occupies center stage in every owner’s and financier’s thinking not only in Piraeus, but Oslo and Singapore as well, for slightly different reasons I’m sure. So, we only need to make sure then that the goose stays alive and prospers in the next five years as well.

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