A Peek Inside – Seaspan’s Piece of the Carlyle/Tiger Vehicle

With apologies to Frank Sinatra, “it was a very good year.” Seapan’s fleet continued to expand on schedule, generating improved normalized net earnings and cash available for distribution. And with the additional vessels, as well as the ones coming, the company’s cash flow will continue to improve setting the stage not only for the announced 50% dividend increase, but the adoption of a progressive dividend policy, aimed at increasing dividends in a manner that both preserves the company’s long-term financial strength and its ability to expand its fleet. This is consistent with its mantra of rewarding its shareholders while growing the company but not at the expense of the balance sheet.  The company finalized its equity needs and completed the financing requirements for the balance of its newbuildings back in October and with the sale of the preferred shares, the company for the first time, in several years, has substantial growth capital. But why rest on your laurels?

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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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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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Backwards Through the Looking Glass

By Peter Shaerf, Managing Director, AMA Capital Partners and President NYMAR

Well, January 2010 could not have come fast enough…it seemed 2009 was the invention of the “Brave New World” — not so much Huxley’s but a whole new economic paradigm. Not a huge distance from the Great Depression, 2009 was the year we saw the Wall Street clown turn on his heels and run…to clown school! Or the downtown financiers move uptown and open a yogurt store (ill advised). Historically, one was even reminded of Ben Cohen and Jerry Greenfield who, rather than pursue the conventional careers prescribed by their parents, bought a $5 correspondence course in ice-cream making. The rest (“Ben and Jerry’s ice cream” – now a subsidiary of Unilever) is history. There is life outside the conventional walls, and 2009 seemed to be the year of self-discovery.

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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.

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Debutante

Last week D/S Norden (“Norden”) held its first Capital Markets Day in New York at the prestigious Four Seasons Hotel. The event was hosted by Mr. Ivar Hansson Myklebust, EVP and CFO, and Mr. Martin Badsted, VP & Head of Corporate Secretariat. As this was the premier event in N.Y., the crowd was relatively small but high powered and included, among others, key New York shipping analysts Natasha Boyden of Cantor, Doug Mavrinac of Jefferies, Glenn Muller from JP Morgan and Michael Webber from Wachovia. Others in the audience included investors as well as Peter Shaerf of AMA.

The company allocated three hours for the presentation and Q&A session and we are struggling how to distill the in-depth presentation and do it justice. Objectivity is also an issue as we are ardent admirers of the company’s rather unique market approach and strategy. With that said, here are our key takeaways and our favorite slides from their presentation.

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