No Surprises This Quarter Either

On Wednesday, Dealogic released its Bookrunner and MLA Tables for Syndicated Shipping Loans for the 9 months 2009. As expected, total volume and transactions were well down from the prior year. Total deal volume was $25.6 billion in 85 transactions compared to $72.2 billion in 263 transactions over the same period in 2008, confirming what we hear anecdotally. In percentage terms, the nine-month decline was 64.5%, which was less than the quarter over quarter reduction of 73.9% suggesting relief is not yet in sight.

Looking at the changes in the tables from the first half of the year, there was movement in the bookrunner table (figure 1) as Mitsubishi UFJ jumped from 8th place to 1st on the strength of two NYK deals booked at the end of September. This pushed SMBC into 2nd place. In a similar fashion, ING moved from 9th to 3rd on the back of the Bluewater transaction, while BofA Merrill Lynch, which was not even in the top 20 came out of nowhere to finish in 9th place based upon the Tidewater transaction. DnB NOR and Mizuho rounded out the top five finishers. The data is particularly striking in that 9 banks made the top 20 having done only a single transaction.

Written by: carisk | Categories: Freshly Minted, The Week in Review | October 8th, 2009 | Add a Comment

BLUEWATER HIGH YIELD: THE NEXT BIG THING?

By Urs M. Dür

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.