Arpeni Misses Bond Payment

Indonesia’s PT Arpeni Pratama Ocean Line (“Arpeni”) has failed to pay the semi-annual coupon on its USD notes which was due 03 May 2009. The original size of the 8.75% bond issue was USD 160 million, but the outstanding amount is USD 140.85 million. According to Fitch Ratings (“Fitch”), Arpeni has 30 days from the due date to pay the coupon to avoid a default and the credit rating agency believes that the company may have faced a temporary liquidity issue, which could be related to its derivatives contracts. Arpeni has been involved in derivative contracts aimed at managing interest costs and fuel hedges.

A Bellwether?

The bond market is getting better. As we saw with the Hornbeck bond last month, spreads and trends are improving. The economy seems to be bottoming out and with an improving economy and inflation fears increasing interest rates should follow. The timing for an offering seemed propitious then as it does now.

It was therefore no surprise that Seacor Holdings Inc. (“Seacor”) became one of the first NY-listed “shipping” companies to issue bonds this week when it priced and sold $250 million of 7.375% Senior Notes due in 2019. The issue was priced at 99.239% to yield 7.471%, reflective of the current market and at a much better rate then would have been achievable 6 months ago. This equates to 400 bps spread over like term Treasuries.  The issue was well received and several times oversubscribed and despite requests to upsize the deal, Seacor was satisfied at the current level.

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