Citi and China Exim Support Toisa

While we are still on the subject of Chinese banks’ strong support for domestic shipyards, China Exim Bank has joined hands with Citigroup to provide offshore owner Toisa limited with a structuring financing solution of up to 10 years. USD 127 million of debt will be used to finance three anchor handling tug supply vessels (AHTS) and one platform supply vessel (PSV) ordered at Wuchang Shipyards. Wuchang Shipyards is one of the key shipbuilding units under the state-owned shipbuilder China Shipbuilding Industrial Corporation. Continue Reading

Swap to Extend

On Tuesday, Teekay Corporation announced a cash tender offer for all of its outstanding 8.875% Senior Notes due 2011. As of December 31, 2009, $176.6 million aggregate principal amount of these notes were outstanding. The total consideration for the tender offer will be $1,078 per $1,000 principal amount, consisting of a tender offer premium of $60 and a consent payment of $18 for early tenders. The offer, managed by J.P. Morgan, is scheduled to expire February 9th.
Continue Reading

Not to Be Outdone

Navios Maritime Partners announced after the market closed Wednesday that it intended to issue 4 million common units with a green shoe of 600 thousand units. Proceeds would be used for fleet expansion and/or general partnership purposes. The deal was priced today at $14.90 per unit, a discount of 5.8% from the prior close.

Joint book running managers were Citi and JPMorgan with S. Goldman Advisors, DVB and Cantor Fitzgerald serving as co-managers.

Teekay LNG goes to the Shelf

Having filed its F-3 shelf registration on October 20th (effective on the 29th), Teekay LNG Partners wasted no time and announced on Monday the offering of 3.5 million common units with a green shoe of a further 525,000 shares. On Tuesday the company announced that the shares were priced at $24.40, which is a discount of about 5% to Monday’s close at $25.67 just before the announcement.
Continue Reading

All Eyes Are On Genmar

We know that General Maritime’s dynamic duo, Messrs Georgiopoulos and Pribor are on the road marketing their $300 million senior unsecured notes offering due in 2017 and so, while they are busy selling we thought we would take a read of the high yield market.

Earlier this week, Navios Maritime Holdings closed its successful $400 million private offering of first priority ship mortgage notes due in 2017. Rated BB-/Ba3, the coupon on the notes was 8.875% and was priced to yield 9.125%. The company escrowed $105 million of the proceeds to provide additional financing to complete the purchase of two new vessels with the balance used to repay existing credit facilities.
Continue Reading

Despite Its Ups and Downs, It Really Has Been a Good Year

We are frequently guilty of focusing on each day or deal as it comes and often lose sight of the whole. And, so we were pleasantly surprised by a collection of data, which put his year’s capital markets activity in context and reminded us of the resilience of our industry. With bank lending at a nadir, it fell to the investment bankers to fill the void, which they have tried to do mainly with follow-on equity offerings and lately with the return of high yield. Neither is a perfect substitute for low-cost bank debt given size limits, cost and dilution, but it is all we have.

As writers, we are not big fans of PowerPoint, in general, but often there is a slide or two that reminds us that a picture is worth a thousand words. Such was the case in the presentation made by Anup Mysoor of Citi at our recent conference in Busan.

From Mr. Mysoor’s presentation we have chosen three slides that we think demonstrate where we are today and what has been accomplished to date.
Continue Reading

One Step Forward One Step Backward and One Tentative Step….

Danaos Corporation reported this week that it had now obtained waivers from all its lenders covering all the prior breaches of financial covenants in its credit facilities as well as any subsequent breaches until October 1st 2010.

Less positive was the news that Zim Integrated Shipping Services stated that it is reducing unilaterally all of its long-term charter payments by 35% commencing September 1st for a period of 3 years. Danaos, which has 6 vessels on charter to Zim for 12-year periods, has not accepted this condition nor has it acquiesced to this reduction. The company is currently in discussions with Zim and is evaluating the situation.

Continue Reading

Back to the Well

Utilizing its $500 million shelf registration from February, Navios Maritime Partners (“NMP”) went back into the market last week for its second follow-on offer of this year. In May, NMP issued 3.5 million shares at a price of $10.32. Last week’s offering of 2.8 million shares was priced $12.21 per share a discount of 6.5% from the prior day’s closing price. Proceeds will be used to fund its fleet expansion and/or for general corporate purposes.

Continue Reading

Euroseas and Citi Join Forces

About two weeks ago, Euroseas, utilizing its existing shelf registration, entered into a continuous offering program equity distribution agreement (“COPED”) with Citi to sell up to 7 million shares of common stock from time to time through Citi as a sales agent. Under the terms of this equity distribution agreement, Citi may act as a principal and purchase shares at a price agreed upon at the time of sale. For its services Citi will be paid a commission of 2% of the gross sales price. Proceeds will be used for general corporate purposes and to fund vessel acquisitions.

Since the transaction was announced on September 4th, the share price has steadily risen from $4.40 to 4.76 on average volumes of about 96,000 shares.

Continue Reading

Tightening the Screws

Last week, Global Ship Lease (“GSL”) announced that they had come to terms with their bankers, Fortis, Citi, HSH Nordbank, DnB NOR and SMBC, with respect to an amendment of their $800 million credit facility. The amendment incorporates the following main terms:

• The LTV covenant is maintained at 75% but is waived through November 30, 2010, meaning the first test will take place on April 30, 2011. Ongoing testing is conditioned upon the availability of valuations.
• Amounts borrowed under the facility will bear interest at LIBOR plus 3.50% through November 2010 and thereafter pricing will be on a grid of 2.50% to 3.50% depending on the LTV.
• The $82 million purchase of the CGM Berlioz will be funded by a $42 million drawdown on the facility, no less than $20 million from cash on hand with the balance of no more than $20 million funded from an over advance loan (“OAP Loan”) under the facility.
• The OAP Loan has repayments scheduled for November 2009 and January 2010 based upon free cash flow in excess of $20 million. In any event, the loan must be repaid in full by June 30, 2010.
• Concurrently, with the Berlioz funding, all undrawn commitments, approximately $200 million, will be cancelled and the facility will convert to a term loan.
• CMA CGM has agreed to defer redemption of its $48 million in preferred shares until after the final maturity of the credit facility in August 2016. Dividends on these shares will be permitted. In addition, CMA CGM will not reduce its holdings of common shares below the current level of 24.4 million until the conclusion of the waiver period, November 2010.
Continue Reading