Erin Go Bragh – “Irish Troubles” Impact SFL

These days this Gaelic expression takes on even greater meaning. In its Anglicized version, it means Ireland forever, however “bragh” is more often literally translated to mean “until doomsday”. While we remain certain Ireland is here forever, it would appear that economically it was pushing the latter boundary.  But what does that have to do with ship finance? Quite simply the latest offering of bonds by Ship Finance International experienced the fallout of the latest “Irish Troubles.”

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“The Market Is Hot” – The Theme of Yield Continues

While the action in bonds this week continued in Norway, New York joined the fray with Ship Finance’s latest offering. The beauty of Norway’s market is its speed and simplicity but Wall Street is the place for longer tenor dollar denominated deals such as Ship Finance’s ten year senior unsecured offering.

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ACLI Receives Platinum Touch

On Monday, American Commercial Lines Inc. announced it had entered into a definitive agreement to be acquired by an affiliate of Platinum Equity, a private equity firm “specializing in the merger, acquisition and operation of companies that provide services and solutions to customers in a broad range of business markets.” The transaction has an enterprise value of $777 million), which implies a 7.4X TEV/EBITDA multiple using a LTM EBITDA of $104.9 million as of June 30^th according to John Parker of Jefferies. Continue Reading

Genmar Buys Time – Amends Loan Agreement and Enters Into Bridge Loan

On Tuesday, General Maritime announced it had amended its Credit Agreement dated July 16, 2010 with Nordea Bank and DnB NOR to allow the company an additional year, ending September 30, 2011, in order to raise a minimum of $52.4 million in new equity (the balance needed to achieve 40% of the purchase price), which will be used to partially finance a portion of the purchase price of the last two vessels to be delivered under the Metrostar agreement.

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A Look at the Numbers – “You got to know when to hold ‘em, know when to fold ‘em”

By George Weltman

One does not often hear public companies these days speaking about going private. And why should they? In today’s world of limited bank lending, access to capital is paramount, with liquidity a close second. The world has changed immeasurably from the past when public shipping companies worried about the lack of recognition or respect that their shares received, what perhaps could be called the Rodney Dangerfield syndrome.

Years ago, shipping shares were on no one’s radar and China had yet been admitted to the WTO. Other than OSG, TK and NATS among others in the U.S., shipping shares were mainly traded on international exchanges, where shipping held some importance.
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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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Live with CNBC at the Jefferies Conference

As usual these year’s Jefferies 7th Global Shipping Conference was a huge success. Not only was it well attended by investors, CNBC set up shop and interviewed many of the participants during the morning session. When asked about the mood of the conference we were somewhat stumped. Jefferies economic gurus, Art Hogan and Ward McCarthy, described their economic view, as subdued optimism and this view, when we thought about it, seemed to permeate the view of the presenters. Investors, on the other hand, had their game faces on. Surely, they were interested after all they made the trek uptown to the beautiful Mandarin Oriental, but would they invest, given recent market volatility, is a whole other question we are unable to answer. But one investor may have got it right suggesting that if the Dow were back at 11,000 investors would be all over the shares.

Getting Closer – Ridgebury Fine Tunes

Last week, the principals of Ridgebury Tankers filed the 2^nd amendment to their equity offering. In the latest revision, the amount of the offering was increased to a maximum of $340.8 million up from $325 million in the prior filing. More importantly however was the indication of increased momentum as UBS and Wells Fargo joined Jefferies as joint lead bookrunners. We highlight the preliminary terms in the Guts of the Deal below.

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Apropos of DryShips

Last week Vantage Drilling Company successfully completed a bond and equity offering which will allow it to acquire the 55% interest in Mandarin Drilling Company it does not own from F3 Capital, a company controlled by the main shareholder of Vantage. Mandarin owns the construction contract for a drillship, the Platinum Explorer that is to be delivered this November. The drillship, which is being constructed at DSME Shipyard (Daewoo) in South Korea, can operate in water depths of 10,000 feet with a maximum drilling depth of 40,000 feet. The shipyard construction price is $630 million, which price increases to $740 million including owner furnished equipment. The drillship is contracted to ONGC, India’s national oil company, for five years at a rate of $590,500/day. In addition to the acquisition, the company intends to use the proceeds to refinance its existing debt, including its credit facility and the 13.5% notes issued by its subsidiary, P2021 Rig Co., and for general corporate purposes.
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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.