Funding Opportunities

Last week, Goldenport Holdings Inc. announced a share issue by way of a “placing and open offer” to raise approximately STG 23.5 million or $35 million. The company intends to issue ~18.5 million shares at 127 pence per share, a discount of 1.55% from the prior day’s closing price. In order to demonstrate their commitment as well as to maintain their share position, Captain Paris Dragnis, the founder and CEO of Goldenport, along with certain directors have irrevocably undertaken to acquire approximately 7.5 million shares or approximately 40.7% of the offering. Seeing opportunities based upon the economic recovery and improving shipping fundamentals, the company intends to use the proceeds to fund future acquisitions. Assuming a conservative 50% leverage, the company will have at least $70 million of capacity to go shopping. Jefferies and Panmure Gordon are the joint bookrunners and underwriters with HSBC acting as Sponsor and Financial Adviser. The deal is expected to close on July 20^th.

Notes in Demand

Singapore listed marine services provider Ezra Holdings is raising new debt with the advice of DBS and HSBC. The three year USD 100 million unsecured guaranteed financing will comprise fixed rate notes and a transferable term loan facility. What is a transferable term loan? Simply put, it is a bank loan facility that can be traded between lenders. According to the Law of Multi-banking Financing: Syndications and Participations published by Agasha Mugasha, transferable term loan is a form of securitization that allows banks to trade loan assets, with the objective to improve the liquidity of the transferor banks and diversify lending risks.  

No details on the actual split between the two arrangements have been announced but marketing for the notes has commenced on Tuesday, with the institutional investors largely in mind. Proceeds will be used to finance new business opportunities and capital expenditure, possibly to fund the acquisition of the Crusader 2, an ice class DP3 well-intervention vessel. 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.
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Price Sensitive

While not close followers of the cruise business, we followed the Regent Seven Seas Cruise $200 million senior secured note offering due in 2017, because of our interest in high yield. The notes were to be issued Seven Seas Cruises S. DE R.L. in a 144A offering. The notes would be guaranteed by the subsidiaries that own the company’s three cruise ships and the notes and the guarantees would be secured by a second priority lien on the same collateral securing the existing senior secured credit facilities, including 2nd priority mortgages on the ships.

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We Have Not Yet Gotten Past Restructurings

K-Sea Transportation Partners announced last week that late in December, its subsidiary, K-Sea Operating Partnership had entered into amendments of both its revolver and term loan facilities. The revolving credit facility is led by KeyBank, Bank of America, Citibank, Citizens Bank and HSBC. The amendment to the revolver provides for a reduction of the lenders’ commitments from $200 million to $175 million, subject to a maximum borrowing base equal to 75% of the orderly liquidation value of the vessel collateral, and eliminates the $50 million accordion feature. In addition, the agreement calls for the acceleration of the maturity date by 2 years and additional security. The fee to amend the agreement was $1.275 million.
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The World Tilts East

Dealogic issued the full year league tables for 2009 this week and there were few surprises. Volumes were down as one would have expected and there was a certain Asian flavor to the leaders.

Perennial leaders DnB NOR and Nordea were supplanted by Mitsubishi UFJ Financial Group, which took the number one spot in both the Bookrunner and Mandated Lead Arranger tables. This strong showing was based upon their strong relationship with NYK Lines, for whom they were the sole arranger on two deals totaling $2.5 billion and their lead position on the largest deal of the year, AP Moller-Maersk’s $6.5 billion transaction. Don’t cry for the Norwegians. DnB NOR held its own, finishing in 2nd place in both league tables. Their finish was largely determined by transaction size as the number of transactions were comparable. Nordea slipped to 5th in the bookrunner table but finished third behind DnB in the all-important MLA table.
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The Importance of Self Preservation

In 2009, the equity markets had a roller coaster run, but some shipping companies found windows of opportunity for share placements, often tied to debt reduction. Self help through raising equity capital for balance sheet recapitalization is one way to ride through the difficult times. There had been varying degrees of success and among the most notable would be Neptune Oriental Lines’ (“NOL”) USD 972 million rights issue in June and NYK’s recently concluded JPY 116.4 billion (USD 1.3 billion) global equity offering. Continue Reading

A Noble Breed

Last week, our sister publication Freshly Minted reported on Maersk’s successful EUR 750 million (USD 1.3 billion) five-year bond. This was the shipping conglomerate’s first bond issuance, following a recent equity offering of USD 1.7 billion. In Asia, commodity trading house Noble Group has likewise found tremendous success in raising funds, suggesting that investors and bankers are getting warmed up to investing cash again. 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.
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A First

These are difficult times and, as the expression goes, there is a first time for everything. Last week, A.P. Moeller – Maersk A/S (“Maersk”) successfully placed a EUR 750 million ($1.3 billion) five-year bond with a coupon of 4.875%, which equates to 237bps over German government debt, according to Pareto.  This is the company’s first bond issuance and was 6.5 times oversubscribed.

Proceeds from the offering will be used for general corporate purposes and for repayment of drawings under longer-term bank revolving facilities that will be retained as liquidity buffers.

This transaction follows a recent equity offering of $1.7billion evidencing that even for the best there is never enough liquidity.

Danske Bank, HSBC, ING, J.P. Morgan and Nordea placed the bonds, which will be listed in Copenhagen and Luxembourg.