The Right Product for the Right Time – Teekay Offshore Follow-on

Last week, the Wall Street Journal reported on the “Frenzy in Energy Partnerships”. “Lured by hefty yields, investors are pouring billions of dollars into a small corner of the stock market – energy focused master limited partnerships – which has seen a huge rally of 15% this year.” This has caused concern, as these gains are not the result of a meaningful change in fundamentals but simply the consequence of a rush of new money into the sector. This should come as no surprise as investors seek safe havens for their cash and, in this instance, are rewarded with yields, a portion of which may be tax free, well in excess of Treasuries.
Continue Reading

No Hype. We Delivered!

Our Chairman’s promotions are sheer artistry and we constantly marvel at these masterful gems. Of course, there are issues with punctuation but why let that get in the way of a great pitch. The amazing thing is that despite his protests otherwise, he really does get it. Our problem is that he is rubbing off on us and we are moving from analytical and objective to the dark side where it’s all about the love as both Matt and he are fond of saying. In the case of this year’s Marine Money week, there is no doubt we got it right. The numbers speak for themselves. This year we went out on a limb denoting the theme as the Comeback or Confidence Returns to Ship Finance. Whether or not that was the case and we believe it is, 1,078 registered guest wanted to hear the answer. This was a new record surpassing 2008’s 1042 guests. Uncertainty + optimism trump a boom.

We relish the awards afternoon. We devote a great deal of energy, although far less than the dealmakers themselves, in choosing the transactions from the many submissions we receive and it is a pleasure to see the winners bask in the recognition they rightfully deserve. It is also educational as the latest structures and ideas are on display for all to see and take advantage of as appropriate. Nigel Thomas and Dan Rodgers of Watson, Farlay & Williams did a masterful job moderating the session which included presentations by Sheldon Goldman, Efthymios Bouloutas of Marfin, Ronny Bjornadal of Nordea, Sean Durkin of NSF, Gerrit Parker of Citi and Craig Fuehrer of Deutsche Bank.
Continue Reading

Dream Team in the Making

After 20+ years at Citi, Simon Booth has decamped and moves to Deutsche Bank effective September 1st, where he will serve as a Managing Director and Co-head of Deutsche Shipping, Deutsche Bank’s lending arm to the shipping sector.  Simon will be based in London and head up Deutsche Shipping alongside Ralf Bedranowsky, who is based in Hamburg where Deutsche Shipping is based.

This move further strengthens Deutsche Bank’s overall shipping sector coverage platform, which includes Craig Fuehrer in New York as the Head of Deutsche Bank’s Investment Banking platform offering capital markets and advisory product experience as well as Justin Yagerman’s equity research platform with approximately 15 shipping companies currently under coverage. For borrowers, Deutsche Shipping’s global presence makes it a one-stop place to shop for financing solutions in both the loan and capital markets. Through it careful focus on long-standing client relationships, consistent risk management and continuously diversified shipping portfolio, Deutsche has not only survived the credit crisis but continues to thrive in these illiquid markets.

Marine Money Capital Market League Tables

Deutsche, Morgan Stanley, DnB NOR, JP Morgan, Pareto and Citi Top League tables from Busy start of the year

By almost every measure, the start of 2010 has been a good one for those working in the capital markets for shipping. Over $2 billion has been raised in the US public equities markets, while in excess of $2 billion has been raised in the Western public debt markets.  What is more another $2 billion in shelf registrations have been filed, with many additional projects at various stages of development.

Part of the story for the first part of 2010 has to be shipping’s remarkable ability to have avoided the catastrophic meltdown so many predicted.  But, perhaps, an even more dramatic story has been the sure arrival of the influence of the public shipping company, with its nearly instant access to capital with which to take advantage of opportunity.

Marine Money’s recent survey of the bank and investment banking communities (see the May issue of Marine Money published shortly for more details) showed that by a wide majority public companies currently do and would continue to enjoy greater access to funding, and therefore a competitive advantage.
Continue Reading

Another Dropdown Coming?

Last Thursday as we reported Navios Maritime Partners announced the follow-on offering of a further 4.5 million common units with a green shoe of 675 thousand units. On the following day the transaction was priced at $17.84 per unit a 5.26% discount from Thursday’s closing price of $18.83. Proceeds from the offering will be used to fund its fleet expansion and for general partnership purposes. Greater detail is shown in our Guts of the Deal below.
Continue Reading

Insatiable!

Investors cannot seem to be able to get enough of the shares and bonds of Teekay and its subsidiaries. In the latest iteration, Teekay Tankers announced Monday, after market close, its intention to offer 7 million shares of Class “A” common stock of the company in a public offering. But even before the market opened the next day, the company announced that the offering had been increased to 7.7 million shares, following the trend of Teekay’s previous offerings.

With the joint bookrunners, UBS, Citi, J.P. Morgan and Deutsche Bank opening up their retail systems, the bulk (75% to 80%) was covered by retail with the balance covered by institutions. In a world of low interest rates, a consistent dividend payer is a star.
Continue Reading

Seacastle Redux Or Fortress’ 2nd Attempt to Exit

Stripping off the baggage of its container ships and chassis, both unattractive businesses today, Seacastle Inc. has offered the public the opportunity to invest this time in its container leasing subsidiary through an initial public offering of that business, which they have named SeaCube Container Leasing Ltd. This is another example of a part that might be worth more than a whole as management recognized the recent outperformance of the publicly traded container leasing companies, Textainer and TAL International due to operating leverage. Trade has begun to resume which equates to more boxes coming on line, higher utilization and hence more revenue, with little incremental cost. In addition, given the financial constraints of the liner companies due to a very difficult 2009, it is likely that the lines will increase the portion of leased rather than owned containers in their fleet. From that standpoint, timing could not be better.
Continue Reading

OSG Goes the High Yield Route

Following its recent equity offering, OSG announced on Monday its plans to issue $300 million of unsecured senior notes due in 2018. Proceeds will be used to pay down the balance on the company’s $1.8 billion senior revolver due in February 2013 that bears interest at LIBOR + 70 bps. As of year-end, the revolver balance was $654 million and under its terms the facility steps down $150 million annually in 2011 and 2012 before the final maturity in 2013.
Continue Reading

Equity Appetite Remains Strong

On Monday, Capital Product Partners announced that it planned to offer 5.8 million common units in a public offering. The transaction was priced the next day at $8.85 per common unit ,a discount of 6.25% from the prior day’s closing price. Proceeds will be used to acquire the M/T Atrotos, a 48,000 DWT product carrier built in 2007 from its sponsor, Capital Maritime & Trading, for $43 million and for general corporate purposes. Chartered  to Arrendadora Ocean Mexicana for $19,900 net per day, the vessel is sub-chartered to Petroleos Mexicana for five years. Operating costs for the period are fixed at $3,575 per day, which is a very competitive cost even for a modern ship.
Continue Reading

On Hiatus

No matter how good the story or how well prepared the company is the uncontrollable variable in a market offering is uncertain and volatile markets. Continuing their downward trend of the last couple of weeks, both the stock and credit markets reacted negatively last week to possible Fed tightening and the uncertainty in Europe.

With this as the backdrop, Songa Offshore SE was on the road launching its $200 million 7 year notes. Price talk for the notes was in the area of 10.25% or approximately LIBOR + 700 on a swap adjusted basis. The notes are unsecured and non-callable for 4 years. Moody’s and S&P rated the notes Caa1 and B+ respectively with a stable outlook.
Continue Reading