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SC to BOX – Seacube’s 2nd Attempt
Back in April, we wrote the following:
“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.”
EZ Pass – Navios Maritime Partners Returns for More
On Thursday, after the market closed, Navios Maritime Partners L.P. announced and the next morning it priced it latest follow-on offering. If only everyone found it so easy. It is not simply just the fact of being public. Performance, story and reputation are also crucial and make the process smooth and simple or so it appears. The partnership has already raised $134.6 million thus far this year and with the latest offering will bring the year to date total to $231.7 million.
In this instance, Navios Maritime Partners intends to issue 5.5 million common units at a price of $17.65 per unit, a 5.1% discount from the prior close. In addition, it will offer a green shoe of 0.825 million shares. Exclusive of the green shoe, gross proceeds will be approximately $97.1 million. Upon the closing of the offering, Navios Maritime Holding will own approximately 28% interest in the partnership, after giving effect to the 2% general partnership contribution.
Who Wants to Call the Turn?
We might. While the data may be considered slim and possibly distorted by the $6.75 billion A.P Moller-Maersk transaction, the nine-month 2010 Dealogic shipping data intimates a reversal in the downward trend in syndicated lending which began in 2007. Not only were the number of syndicated deals, volume and new money higher, club deal volume and numbers were down. The latter of course might just reflect deal size, where five of the top fifteen deals were in excess of $1 billion, but we will give the data the benefit of the doubt. In terms of specifics, the number and volume of deals for the 9-months of 2010 was 110 deals totaling $28.4 billion versus the one year earlier total of 90 deals totaling $25.9 billion. The best way to see the trend over time is to look at the data, which we show pictorially below. And, yes, you needn’t remind us that one point does not make a trend.
Doesn’t Get Better – Hapag Lloyd Offering Upsized and Trades Up at the BreakImproving Leverage While Increasing Liquidity – Teekay Tanker Follow-On
Initially targeting $500 million in a two tranche offering of Euro and Dollar bonds, Hapag Lloyd benefited from strong investor appetite and upsized it’s offering by EUR 145 million ($200 million) an increase of 40%. In terms of final numbers, Hapag issued EUR 330 million of 9.5% 5-year Euro notes and $250 million of 9.75% 7-year Dollar notes.
The Euro notes and Dollar notes were issued at 99.5% and 99.37% respectively to yield 9.55% and 9.875%. At the break, both senior notes traded up at around 103.5%.
US Capital Markets Fuel Corporate Activity – Wall Street Firms Execute For Clients
Marine Money Capital Market League Tables Highlight
DnB NOR, Deutsche, Citi and Jefferies
Marine Money’s survey of the global banking community in the spring told a dramatic story. Banks prefer lending to and doing business with public shipping companies. Transparency, performance and the simple fact that public company managements with their access to capital have been among the most active in the business – that activity of course translates into fees – makes the case that capital markets access and execution capability are important skills. We celebrate here the Capital Markets performance of the leading Wall Street banks and their first half contributions to the shipping community.
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A Rising Tide Not Only Lifts All Boats, But Also Allows a Recapitalization and Perhaps Even an Exit
Last week, Hapag-Lloyd began marketing a $500 million bond issue in Europe and the U.S. to qualified investors, as part of a debt re-structuring, which will most importantly, stabilize the company’s balance sheet. The company intends to issue $500 million in the aggregate of senior unsecured notes, which will consist of a combination of dollar denominated notes due in 2017 and Euro denominated notes due in 2015. The notes will be guaranteed on a senior basis by “Albert Ballin” Holding, the shareholding entity. Initially, the proceeds of the notes will be escrowed and released only upon the receipt by the company of a minimum of $290 million of proceeds from the K-sure financing (Ex-Im financing, guaranteed by the Korea Trade Insurance Company, for the acquisition of 6 x 8,749 TEU containerships to be built at Hyundai). More details, based upon the preliminary prospectus and market talk, are provided in our Guts of the Deal herein.
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.
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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.
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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.
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The Official Guide To Marine Finance Providers
Shipping Index
