Silence Is Golden

It’s Wednesday, as we write this, and for the first time we can remember in months it’s been a quiet week in terms of transactions. We took the opportunity of a free moment to meet with Mark Friedman and Hugh Baker of Evercore Partners. Our agenda was twofold: we wanted to understand how Evercore is positioning itself in the competitive landscape of investment banking and to engage in a post-mortem of the recent shipping equity offerings to better understand why some have succeeded while others struggled.

Evercore is different. It is obvious when you walk into their offices, which are quieter than a library should be. There is no trading floor. This is about advisory work in the old style, built on relationships and trust. Like all bankers, they are client-centric, but with a difference. Lacking distribution, they are less driven by the constant need to feed securities through a distribution network. Instead, they are focused on long-term relationships and providing the highest quality advice with respect to their clients’ strategic needs.
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Written by: carisk | Categories: Freshly Minted, Market Commentary | April 15th, 2010 | Add a Comment

Memories and a Miscalculation

The Good News
We wonder whether in preparing his keynote address for our Hamburg conference entitled Memories, a view of what happened to and where the industry is heading, Mr. Arntzen had a memory of his own and thought, “Wasn’t there a time when OSG accessed the capital markets?” Seizing on the thought and the opportunity, Mr. Arntzen jumped on the Lexington Avenue Express and headed down to Wall Street to arrange a follow-on offering of OSG’s shares. Given the high repute and credit standing of his company, Mr. Arntzen knew the investment banks were hungry and would compete heavily for his deal. There was no need for an overnight or marketed transaction so he simply arranged an auction among the banks (more than 5 but less than 10) for 3.5 million of OSG shares.
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Written by: carisk | Categories: Freshly Minted, The Week in Review | March 11th, 2010 | Add a Comment

A Wisp of Spring

While sitting home in the midst of a blizzard and with the knowledge that the omniscient Punxatawny Phil announced on Ground Hog Day that we still have 6 more weeks of winter, we know, nonetheless, that spring will inevitably come. Yesterday we attended the morning session of the Hellenic/Norwegian-American Chambers of Commerce 16th Annual Joint Shipping Conference and we felt similarly that the winter of ship finance may also break. While the tone wasn’t exactly upbeat, there certainly were no dirges being sung and it, in fact, appears by their comments that the bankers may be ready and able to return from their year plus long sabbatical. But as Nikolai Nachamkin of DnB and the conference co-chairman would remind me, I am getting off topic.
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Written by: carisk | Categories: Freshly Minted, The Week in Review | February 11th, 2010 | Add a Comment

A Great Catch

It is official! Hugh Baker, formerly of HSH-Nordbank and ING, will join Evercore Partners as a Managing Director reporting to Mark Friedman. According to Mr. Friedman, “ We feel very fortunate to bring Hugh to Evercore. He is an extraordinarily talented banker with deep industry knowledge and strong relationships globally. His skills and relationships make him a perfect fit for Evercore’s shipping restructuring and advisory practice.” Welcome aboard.

Written by: carisk | Categories: Freshly Minted, Market Commentary | January 7th, 2010 | Add a Comment

Full House in Athens – Part 2

By Kevin Oates

…in the longer term shipping should correct but quality, transparency and financial strength are key to survival.

Despite the tough market and the general lack of ship finance, Marine Money’s Greek Ship Finance Forum again filled the seats in Athens. With 310 delegates and speakers and some 40 more for the TEN Ltd lunch, there was plenty gossip and exchange of views at the 11th Annual conference held on the 8th of October 2009.

The event had started with a speaker’s dinner the previous night co-hosted by Navios Maritime Holdings and was to end in the early hours of the following morning at the Capital Party co-hosted by Capital Product Partners LP at a well-known Athens nightclub. Even if the market is tough, we still know how to enjoy ourselves.

Back at the conference, our day began with Guy Verberne, a leading economist at Fortis Bank (Nederland) telling us that the economic recovery has come and it may well be sustainable. China, he says, has plenty foreign reserves to prolong it’s stimulus package for as long as it needs and he sees no meaningful cutbacks from the stimulus packages of western governments, at least through 2010. A risk is a double dip in 2011 if we get too bogged down in debt.
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Written by: carisk | Categories: Freshly Minted, Market Commentary | October 15th, 2009 | Add a Comment

OSG Tenders for its US Flag Offspring

Offering OSG America LP Unit Holders $8.00 in cash per unit, Overseas Shipholding Group, Inc. (OSG) announced that it intended to initiate a tender offer for all the outstanding publicly held common units. OSG, through current aggregated holdings, already controls 77.1% of the outstanding equity of OSG America.

“Evercore Partners and BofA Merrill Lynch are acting as financial advisors to OSG. Evercore Vice President Mark Whatley was with Merrill Lynch when OSG America L.P. went public. Whatley is part of the Evercore team, including Senior MD Robert Pacha and Elizabeth Cheever advising OSG now. Although temporarily sidelined on garden leave, we understand that Mark Friedman, who will be back in action next week when he starts as the co-head of transportation and the global head of shipping at Evercore Partners, was also very involved. Simpson, Thacher & Bartlett is acting as legal counsel to OSG.”

Written by: carisk | Categories: Freshly Minted, The Week in Review | July 30th, 2009 | Add a Comment

Dividends Anyone?

With the recent collapse of both commodity prices and the BDI, share prices, particularly on the dry side, quickly followed suit. A decline in share price is never good news, but for the high paying dividend companies it was a double-edged sword. As yield and share price track inversely, the nominal dividends on these shares now equate to extraordinary yields. The whispered question on the street is whether the high dividend paying companies, given the poor market and lack of liquidity, will cut their dividends. Thus far two companies have answered this week with a resounding no. OceanFreight declared its 3rd quarter dividend at the current level. And demonstrating even greater confidence, Navios Maritime Partners increased its 3rd quarter dividend by 10% and announced that the 4th quarter dividend would also be increased by a further 4%.
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Written by: carisk | Categories: Freshly Minted, Market Commentary | October 23rd, 2008 | Add a Comment

Athenian and Viking Confab

In front of a packed crowd at the New York Helmsley, the Hellenic-American and Norwegian-American Chambers of Commerce held their 14th Annual Joint Shipping Conference under the catchy title “Are the Bulls and the Bears Right?”

The day started off with derivatives, a tough topic for early in the morning. Nevertheless, the presenters pulled it off and kept everyone interested. To start off Robert Shaw of Mystras Ventures gave a great overview and primer on freight derivatives. In particular, he emphasized their importance of derivatives for hedging but noted that freight volatility and correlation with other commodities has attracted financial players into the market, a recurrent theme.

Written by: carisk | Categories: Freshly Minted, The Week in Review | February 7th, 2008 | Add a Comment

TBS Offers Investors Blend of Dry Bulk and Liner

Last week we were delighted to see that TBS International Limited filed an S-1 with the U.S. SEC for an initial public offering on the NYSE under the ticker symbol TSI. The company seeks to raise up to $125 million through underwriters Merrill Lynch & Co. (who recently financed some of their ships and brought ex-Goldman Banker Mark Friedman on board in February to build a shipping practice) and Jefferies & Company. For those of you who aren’t familiar with the company, TBS is based in Yonkers, New York and provides liner, parcel, bulk and vessel chartering services on a select group of international routes, particularly between Latin America and China and Japan and South Korea. The company currently operates a fleet of 30 vessels, 13 of which are owned, nine of which are under charters with purchase options, and eight of which are under charters without such options.

TBS International’s strategy is and has been to stay away from the vagaries of the tramp market and instead target niche markets, where the necessity of local knowledge and strong customer relationships creates high barriers to entry. The company considers it important to tailor its scheduling to customers like Honeywell in hard-to-reach ports and with unusual carrying needs. Smaller vessels with flexible capabilities allow the vessels access to a variety of smaller ports that the more popular and economical larger vessels cannot reach. Proceeds from the offering are to allow the company to focus on increasing its market share in key routes while developing new trade routes through selected fleet expansion. As far as make-up, TBS intends to maintain its combination dry bulk and multipurpose tweendeckers focus. If suitable vessels are not available to purchase, then proceeds in the meantime will be used to repay debt and for working capital. Memoranda of agreement have, however, been completed for the purchase of three additional dry bulk vessels, as can be seen in the fleet list.

In the “Risk Factors” section, TBS International cites the extent to which its fate is linked with both the Chinese and global economies. The company notes that it has a history of losses – namely five loss-making years since 1997 – and that it filed for bankruptcy in 2000. A large part of this misfortune can be attributed, the company attests, to the sharp decline in the South American and Asian economies from which TBS derives much of its business. Unlike U.S.-flag Horizon Lines, TBS is fully subject to the volatility associated with international shipping; the hope, of course, is that this will also allow investors greater access to upside potential.

Written by: carisk | Categories: Equity, Freshly Minted | March 17th, 2005 | Add a Comment

Merrill Hires Friedman, Breaks into Shipping

In yet another sign of how hot shipping is in the capital markets, Freshly Minted understands that Mark Friedman has left Goldman Sachs to start a global shipping practice at Merrill Lynch. While at Goldman, Mark called on North American clients like OMI, OSG and General Maritime, though we understand Merrill’s efforts will be global. Adding Merrill to the mix gives shipping companies more access to the retail investor market through their enormous network of retail stockbrokers, something we really haven’t seen fully developed in the past. Unlike many investment banks, Merrill is also a lender when need be. We wish Mark the best of luck in building the practice on what is without a doubt a mighty platform.

In yet another sign of how hot shipping is in the capital markets, Freshly Minted understands that Mark Friedman has left Goldman Sachs to start a global shipping practice at Merrill Lynch. While at Goldman, Mark called on North American clients like OMI, OSG and General Maritime, though we understand Merrill’s efforts will be global. Adding Merrill to the mix gives shipping companies more access to the retail investor market through their enormous network of retail stockbrokers, something we really haven’t seen fully developed in the past. Unlike many investment banks, Merrill is also a lender when need be. We wish Mark the best of luck in building the practice on what is without a doubt a mighty platform.

Written by: carisk | Categories: Freshly Minted, People & Places | January 27th, 2005 | Add a Comment