Just Another Blockbuster

Marry opportunism with an ability to perform and the world is your oyster. Even in these uncertain times Peter G. and his team have a proven capability to perform and hence deals continue to find them. This has been the theme of the past few weeks as Genmar and Genco have made major acquisitions. Last Friday, it was Genco’s turn again and they found a willing seller in Setaf SA, a wholly owned subsidiary of Bourbon, a company, which is mainly focused on the offshore industry, although it had a dry bulk business for diversification.

Written by: marinemoney | Categories: Freshly Minted, The Week in Review | May 12th, 2011 | Add a Comment

Talk of the Town – A Market View

While in Oslo the week before last, the deal on everyone’s lips was the Golden Close Maritime Corp.’s $460 million senior secured bond offering to finance the Deepsea Metro I, a drillship capable of drilling in water depths of 10,000 feet. Scheduled for delivery on May 2011, the vessel is being constructed in Hyundai Heavy Industries at a contract price of $668.39 million with an all-in delivered cost of approximately $800 million.

Written by: marinemoney | Categories: Freshly Minted, The Week in Review | December 2nd, 2010 | Add a Comment

Just Another Blockbuster

Although for many it has become passé, perhaps because the world and information move so quickly, Bourbon utilizes a rolling five-year plan. In the latest iteration, “Bourbon 2015 Leadership Strategy,” the company has turned its focus to its offshore activity, which it intends to grow by further investing in innovative and cost effective vessels. By adding 80 supply vessels and 64 crewboats through a $2 billion investment plan in newbuildings, Bourbon will become a major force in the offshore sector operating a fleet of 600 vessels for deepwater and shallow water logistics services by 2015. Financing will come from the sale of its non-core fleet of 16 Supramaxes to Genco, deferred installments on the newbuildings, with 75% due upon completion, and a $400 million 12- year China EXIM Bank loan.

Written by: marinemoney | Categories: Freshly Minted, The Week in Review | July 1st, 2010 | Add a Comment

NYMAR Live from the NYSE.

The new year’s first serious shipping gathering in NY took place under the aegis of the NY Maritime Association at the New York Stock Exchange. It was an animated audience that filled the Stock Exchange’s stately hall, though we noted the Exchange’s head of events was relieved that unlike Marine Money Week in 2008 he did not have to contend with 150 more guests than NY City fire codes allowed.

Peter Shaerf, AMA Capital partner and President of NYMAR welcomed the crowd and Bob Gruendel, Partner at DLA Piper brought us to the point of Gazing into the Future through the Crystal Ball and wisely at that point turned to Peter Georgiopoulos, Chairman of Genmar, Genco and Aegean, Duncan Neiderauer, NYSE, CEO and Harvey Pitt currently CEO of Kalorama Partners, but former Head of the US Securities and Exchange Commission.

The following is a short summary paraphrasing the comments, note paraphrasing:
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Written by: carisk | Categories: Freshly Minted, Market Commentary | January 14th, 2010 | Add a Comment

A Good Citizen

We should preface this article by stating irrevocably that rumors of the demise of the high yield bond market are patently false. Fund flows have been strong and in fact during last week there was $3 billion done in 9 deals. It is alive and well. NCL and Genmar were successfully completed but First Ship Lease Trust (“FSL”) did not get done and therein lies an interesting story.
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Written by: carisk | Categories: Freshly Minted, The Week in Review | December 10th, 2009 | Add a Comment

Morgan Stanley II

Despite a pressing deadline, we couldn’t pass up the opportunity to get out of the office and attend Morgan Stanley’s 2nd Commodities and Shipping Conference. In these difficult times how could one possibly forego the opportunity to hear what Ole Slorer and his team have to say with the added benefit of gleaning some insights on the capital and lending markets. All interspersed with company presentations and lessons from Morgan Stanley’s commodities and freight trading experts. It is a rare opportunity for us to receive an invitation to these investor only meetings and we are most appreciative. Putting on an investor hat for a moment, we can confirm that if one is interested in the space there is no better way to get an education and gather information about this sector than attending these conferences. And, we did not even benefit from having a one-on-one meeting.

Wiley Griffiths, the Head of Global Shipping, and his team started us off with a view of what was happening in the market. Continuing historic trends, the markets as always remain interesting.

Written by: carisk | Categories: Freshly Minted, The Week in Review | June 11th, 2009 | Add a Comment

Gleanings from Capital Link

Following the CMA, Capital Link held its 3rd Annual Invest in International Shipping Forum at the Metropolitan Club, which was overflowing for much of the day. There were general presentations, panels as well as company presentations. The following were our main takeaways from this forum.

The container sector has been the hardest hit and so we listened with great interest to that panel led by Ken Hoexter of Banc of America Securities-Merrill Lynch. The panelists included Gerry Wang of Seaspan, Aristides Pittas of Euroseas and Dimitiri Andritsoyiannis of Danaos. The collapse of the market is attributable to simple supply and demand. Overbuilding joined with reduced demand resulting from a slowdown in consumer buying. Mr. Wang believes this is a 12 to 18 month problem with 2012 to 2014 being good years. The lines will survive as they exercise self-help by utilizing alliances, like the airlines. Slot sharing is not as effective as filling a single ship instead of having two partially filled. Mr. Andritsoyiannis espoused the certainty that globalization will continue and that the containership is the only way to efficiently move finished goods. Mr. Pittas reminded everyone that it is a cyclical business and the good market will return. He plays the market more than his fellow panelists. He operates his smaller ships on shorter-term charters taking advantage of good markets and laying up vessels when the market is bad. He currently has three ships in lay-up and is relying on his solid balance sheet to get his company through the downturn.

Written by: carisk | Categories: Freshly Minted, Market Commentary | April 2nd, 2009 | Add a Comment

It’s All About Yield Or So We Think

At our esteemed President’s suggestion, we compiled data on a number of traded securities including publicly traded stocks in New York, high yield bond from Jefferies and Norwegian high yield and convertible bonds from NRP Securities ASA. Below we have provided full descriptions of the bonds as well as more complete information on the stocks for greater insight. We then consolidated the data focusing simply on yield and sorted it from highest to lowest.

Matt’s frivolous suggestion was that we could create a holiday shopping list for you from this data. For this Grinch, all these numbers should mean something and so we provide you with some ideas/comments in no specific order:
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Written by: carisk | Categories: Freshly Minted, Market Commentary | December 18th, 2008 | Add a Comment

GMR and ATB Become One

On Tuesday, the shareholders of both General Maritime Corporation (“Genmar”) and Arlington Tankers Ltd. (“Arlington”) approved the proposed combination of the companies with an ample majority. At the Genmar meeting, 21.9 million votes were cast in favor of the combination with 0.1 million against. The shares voting for adoption of the combination represented 99.25% of the shares voted at the meeting and approximately 69.97% of the shares outstanding. In the case of Arlington, 9.8 million shares were voted for the merger with 1.2 million voting against. In this instance the shares voted in favor represented approximately 89% of the shares voted at the meeting and 63.6% of the shares outstanding.

The new Genmar is now well-positioned with its diverse double hull fleet to provide quality service to its charterers as well as create near-term value for its shareholders through the $2 dividend target which is supported by the fleet’s contracted revenue stream.

We congratulate the parties on a well-structured transaction, which, being based upon an exchange of shares, was successfully concluded in these most turbulent of times.

Written by: carisk | Categories: Freshly Minted, The Week in Review | December 18th, 2008 | Add a Comment

New York Conference Features Shipping Star Power

Last week’s Hellenic-/Norwegian-American Chambers of Commerce Joint Shipping Conference offered a plethora of luminaries from shipping’s universe. Between OSG’s Morten Arntzen, Teekay’s Sean Day, GenMar’s Peter Georgiopoulos, Tidewater’s Dean Taylor, NCL’s Colin Veitch, BP’s Bob Malone, Heidmar’s Per Heidenreich, Wilh. Wilhelmsen, Leif Hoegh, Navios’ Robert Shaw, Intrepid Shipping’s Richard du Moulin, Free Bulkers George Gourdomichalis, CR Weber’s Basil Mavroleon, Healy & Baillie’s Glen Oxton, and DNV’s Tor Svensen the bulk of the world’s tonnage was well represented.

The theme of the conference was “Shipping without Borders” which transcended from national identity to the impact of new technologies and landed squarely on the challenges of doing business in America. Or should we say the many challenges of doing business in the (50) States?

Per Heidenreich welcomed the assembled with the observation that “2004 was the most incredible shipping market in history, with Wall Street showing an alarming interest in shipping”. He reflected that the Norwegians are “awfully quiet” and urged them to learn what “makes the Greeks tick.”

The Greek contingent was happy to comply, with George Gourdomichalis offering the strengths of the Greek approach: Piraeus as a maritime cluster, a favorable tax climate, and the transition of Greek family-owned operations to corporations. As a counterpoint, Leif Hoegh underscored the decline in Norwegian shipping, both in the bulk and tanker trades as well as in the yard order book. He further advocated the Greek regard for shipping: “When you go to Piraeus, even the taxi drivers know about tankers. Piraeus is an exhilarating place!” When pressed as to whether the Leif Hoegh company would return to Norway, Mr. Hoegh’s one-word answer was a resounding “No”.

While acknowledging the decline of Norway’s shipping sector, Marianne Lie, Director General of the Norwegian Shipowners’ Association, presented the proposed tax and legislative changes within Norway designed to reinvigorate its maritime industry. The key word is “proposed”. Tor Svensen of DNV attempted to breach the gap by offering the concept of geographic co-location, while Anthony Argyropoulos, newly at Cantor Fitzgerald, adroitly attributed the Greek interest in the capital markets to their entrepreneurial spirit, without discouraging Norwegian interest.

After an overview of the freight futures market by Robert Shaw of Navios, technological advances in this field were covered by Basil Mavroleon of CR Weber, who helped transition the conference by eliminating borders entirely. In his call to action on FFA’s (Forward Freight Agreements), Basil reflected “If, as I believe it will, this market continues to strengthen, who, with underlying physical positions can continue to ignore participation in it – surely we must all find a way to engage with it, learn to utilize it to our benefit and play some part in the growth curve”. Implementation was discussed by Barry Bednar of J. Aron & Company and Tom Even Mortensen of IMAREX.

Wilhelm Wilhelmsen offered a global perspective as the conference’s luncheon keynote speaker. His answer to whether national identity has become irrelevant was a conditional “Yes”. Despite being Norway’s oldest and largest shipping enterprise, only 5% of the company’s employees have Norwegian as their mother tongue, and only a handful of ship calls handled by the company last year were in Norway. He feels that the shipping industry is “almost unwanted by the Norwegian authorities…many (companies) feel strongly that they are literally being kicked out.” Norway is the only major shipping nation that is in decline, with the government “destroying an industry which actually has everything required to ensure good and stable revenues for my country in the future.”

Turning the focus to doing business in the Americas, Sean Day of Teekay pointed to the industry’s image in the financial markets resulting in investor differentiation, and a greater scrutiny on quality of both fleets and management. Mr. Day declared Sarbanes-Oxley a “time sink” and expensive, while acknowledging that Teekay is a foreign filer that complies with US requirements.

Bob Malone of BP Shipping stated that his company’s strategy is to own ships in order to manage risk (against incidents). He felt the need to regain the public trust by managing the company, and pointed to the benefits gained through compliance with Sarbanes-Oxley.

Peter Georgiopoulos of GenMar struck a profoundly wistful note, reflecting that he used to think shipping connoted yachts, former US President’s wives and opera singers, but quickly learned that the world of shipping revolves around OPA, ISM and SARBOX. Regulation is making shipping increasingly expensive, and much less desirable.

OSG’s Morten Arntzen lifted everyone’s mood with his list of “Top Ten Challenges Facing Executives of American Shipping Companies Competing Internationally” (including finding an affordable Starbucks coffee in Europe, explaining why a suezmax built in the United States costs $240 million, and repeating “Foreign Corrupt Practices Act” 10 times). Mr. Arntzen demonstrated to the market doomsayers why the tanker industry of today is dramatically different from that of the early 70’s. He further went on to tout the merits of Sarbanes-Oxley as a significant management tool, and highlighted the benefits accruing to OSG from the recent Job Creation Act of 2004, with its attendant tonnage tax scheme for US-flag shipping.

Dean Taylor of Tidewater reiterated the challenges of doing business in the US amidst extensive and expensive regulation. Mr. Taylor’s remarks were surprisingly dour, considering the profitable condition of Tidewater and their enviable earnings multiple.

Norwegian Cruise Line’s Colin Veitch delivered an overview of how, and why, they decided to pursue a US-flag strategy despite the costs and challenges. Interestingly, it was Mr. Veitch who called upon industry to be proactive, rather than reactive, about regulation (such as environmental policies). With his extensive experience in the public sector, perhaps his suggestion to influence perception could inspire action leading to a positive image for shipping??

Last week’s Hellenic-/Norwegian-American Chambers of Commerce Joint Shipping Conference offered a plethora of luminaries from shipping’s universe. Between OSG’s Morten Arntzen, Teekay’s Sean Day, GenMar’s Peter Georgiopoulos, Tidewater’s Dean Taylor, NCL’s Colin Veitch, BP’s Bob Malone, Heidmar’s Per Heidenreich, Wilh. Wilhelmsen, Leif Hoegh, Navios’ Robert Shaw, Intrepid Shipping’s Richard du Moulin, Free Bulkers George Gourdomichalis, CR Weber’s Basil Mavroleon, Healy & Baillie’s Glen Oxton, and DNV’s Tor Svensen the bulk of the world’s tonnage was well represented.

Per Heidenreich welcomed the assembled with the observation that “2004 was the most incredible shipping market in history, with Wall Street showing an alarming interest in shipping”. He reflected that the Norwegians are “awfully quiet” and urged them to learn what “makes the Greeks tick.”

The Greek contingent was happy to comply, with George Gourdomichalis offering the strengths of the Greek approach: Piraeus as a maritime cluster, a favorable tax climate, and the transition of Greek family-owned operations to corporations. As a counterpoint, Leif Hoegh underscored the decline in Norwegian shipping, both in the bulk and tanker trades as well as in the yard order book. He further advocated the Greek regard for shipping: “When you go to Piraeus, even the taxi drivers know about tankers. Piraeus is an exhilarating place!” When pressed as to whether the Leif Hoegh company would return to Norway, Mr. Hoegh’s one-word answer was a resounding “No”.

While acknowledging the decline of Norway’s shipping sector, Marianne Lie, Director General of the Norwegian Shipowners’ Association, presented the proposed tax and legislative changes within Norway designed to reinvigorate its maritime industry. The key word is “proposed”. Tor Svensen of DNV attempted to breach the gap by offering the concept of geographic co-location, while Anthony Argyropoulos, newly at Cantor Fitzgerald, adroitly attributed the Greek interest in the capital markets to their entrepreneurial spirit, without discouraging Norwegian interest.

After an overview of the freight futures market by Robert Shaw of Navios, technological advances in this field were covered by Basil Mavroleon of CR Weber, who helped transition the conference by eliminating borders entirely. In his call to action on FFA’s (Forward Freight Agreements), Basil reflected “If, as I believe it will, this market continues to strengthen, who, with underlying physical positions can continue to ignore participation in it – surely we must all find a way to engage with it, learn to utilize it to our benefit and play some part in the growth curve”. Implementation was discussed by Barry Bednar of J. Aron & Company and Tom Even Mortensen of IMAREX.

Wilhelm Wilhelmsen offered a global perspective as the conference’s luncheon keynote speaker. His answer to whether national identity has become irrelevant was a conditional “Yes”. Despite being Norway’s oldest and largest shipping enterprise, only 5% of the company’s employees have Norwegian as their mother tongue, and only a handful of ship calls handled by the company last year were in Norway. He feels that the shipping industry is “almost unwanted by the Norwegian authorities…many (companies) feel strongly that they are literally being kicked out.” Norway is the only major shipping nation that is in decline, with the government “destroying an industry which actually has everything required to ensure good and stable revenues for my country in the future.”

Turning the focus to doing business in the Americas, Sean Day of Teekay pointed to the industry’s image in the financial markets resulting in investor differentiation, and a greater scrutiny on quality of both fleets and management. Mr. Day declared Sarbanes-Oxley a “time sink” and expensive, while acknowledging that Teekay is a foreign filer that complies with US requirements.

Bob Malone of BP Shipping stated that his company’s strategy is to own ships in order to manage risk (against incidents). He felt the need to regain the public trust by managing the company, and pointed to the benefits gained through compliance with Sarbanes-Oxley.

Peter Georgiopoulos of GenMar struck a profoundly wistful note, reflecting that he used to think shipping connoted yachts, former US President’s wives and opera singers, but quickly learned that the world of shipping revolves around OPA, ISM and SARBOX. Regulation is making shipping increasingly expensive, and much less desirable.

OSG’s Morten Arntzen lifted everyone’s mood with his list of “Top Ten Challenges Facing Executives of American Shipping Companies Competing Internationally” (including finding an affordable Starbucks coffee in Europe, explaining why a suezmax built in the United States costs $240 million, and repeating “Foreign Corrupt Practices Act” 10 times). Mr. Arntzen demonstrated to the market doomsayers why the tanker industry of today is dramatically different from that of the early 70’s. He further went on to tout the merits of Sarbanes-Oxley as a significant management tool, and highlighted the benefits accruing to OSG from the recent Job Creation Act of 2004, with its attendant tonnage tax scheme for US-flag shipping.

Dean Taylor of Tidewater reiterated the challenges of doing business in the US amidst extensive and expensive regulation. Mr. Taylor’s remarks were surprisingly dour, considering the profitable condition of Tidewater and their enviable earnings multiple.

Norwegian Cruise Line’s Colin Veitch delivered an overview of how, and why, they decided to pursue a US-flag strategy despite the costs and challenges. Interestingly, it was Mr. Veitch who called upon industry to be proactive, rather than reactive, about regulation (such as environmental policies). With his extensive experience in the public sector, perhaps his suggestion to influence perception could inspire action leading to a positive image for shipping??

Written by: carisk | Categories: Forums, Freshly Minted | February 17th, 2005 | Add a Comment