Genco, TBS Tap the Equity Markets

TBS International successfully priced 3,400,000 common shares at $51 this week to raise $173.4 million in an offering led byJefferies and Banc of America as join book-running managers and Dahlman Rose as joint lead manager. Of these shares 2,000,000 (worth approximately $102 million) were sold by the company while the remaining 1,400,000 were sold by selling shareholders in what is understood to be their first sell-out since the company went public in 2005. The trajectory ofTBS’ share price over the past three months, as shown in the Follow-ons & Share Prices graph, leaves little reason to wonder why the selling shareholders might consider this an appropriate time to divest some of their holdings. The move wasn’t too painful for shareholders, either, representing a file-to-offer discount of a relatively modest 3%, with the shares having since rebounded.

Written by: carisk | Categories: Freshly Minted, The Week in Review | May 22nd, 2008 | Add a Comment

NATS Completes Follow-on, TBSI Goes into the Market

Following successful follow-on offerings by Seaspan, Teekay LNG, and Double Hull Tankers and a placement by Pacific Basin, Nordic American Tankers has seen it fit to raise equity to repay borrowings in the immediate future and for expansion in the longer- term, per its business model. NAT has sold 4,000,000 common shares in the offering and underwriters’ have exercised their option for a 310,000 share over-allotment, raising $173 million in gross proceeds. Morgan Stanley led the offering while Dahlman Rose acted as co-manager.

Written by: carisk | Categories: Freshly Minted, The Week in Review | May 15th, 2008 | Add a Comment

TBS Increases Liquidity through Bank of America Facility Amendment.

TBS International this week amended and restated its existing Bank of America facility dating back to the summer of 2006. They increased the deal from $140 million (of which $65m was revolving and $75m was in a term loan) to $267.5 million (of which $125m is revolving and $142.5m is a term loan). TBS will initially draw down the full $142.5 million available under the term facility to pay outstanding principal and interest due on its existing facility, pay closing costs and for general corporate purposes.

Written by: carisk | Categories: Freshly Minted, Transaction Report | April 3rd, 2008 | Add a Comment

Transaction Report

A significant portion of loan volume for the past years, up through 1H07, was driven by refinancing. An $850 million facility could give way to a $1.1 billion facility with a lower pricing and, oftentimes, a different bank. These days things are a bit different. A company can’t simply shop around to get terms that will allow for more ambitious expansion and modernization strategies. They can, however, work with their banks to create facilities that may allow for more opportunities. TBS International and Omega Navigation have both in the past week announced restructurings of their existing credit facilities that accomplish this.

On the topic of the bank debt market, before going further, we’d like to ask all of our banker readers to take a few minutes and answer our 2008 Shipping Banker Survey at http://shmyl.com/zrtpson. The questions are primarily multiple choice and answers are completely anonymous. Of course if you have any additional thoughts or comments, we encourage you to share those as well. In 2007, while statistical reads on the market remained robustly healthy, it was your comments that foreshadowed the credit crisis that would rock the banking markets in the summer and leave them permanently changed. This year we are again looking to you to tell us the real state of the market and what you think might be next.

Written by: carisk | Categories: Freshly Minted, Transaction Report | April 3rd, 2008 | Add a Comment

Shipping Loan Issuance Hits $94 billion in 2007

The numbers are in. Credit problems aside, syndicated shipping loan issuance in 2007 topped out at $93.9 billion, beating the previous year’s record $76.4 billion. While we did see a fall-off in volume of 17% in the third quarter, 4Q07 and 2H07 issuance were both up, by 23% and 10% respectively. This compares reasonably to global leveraged loan volume, which was up 38% in 2007 to $1.77 trillion. However that rise was almost entirely accounted for by the first half of the year, with global 2H07 issuance down by 38% over 2006.

So shipping, it would appear, has thus far been weathering tight credit markets better than the economy at large. No doubt it is helped out by the fact that the shipping markets themselves have by and large remained at healthy, profitable levels even after coming off the dry bulk boom in the autumn. If you said five years ago that investments were safer in a foreign ship than in a major international bank, people would likely have questioned your sanity. But it couldn’t have turned out to be more true.

Written by: carisk | Categories: Freshly Minted, The Week in Review | January 24th, 2008 | Add a Comment

TBS Enters $25 Million Credit Facility

Newly public TBS International announced late last week that the company has entered into a $25 million credit facility with the Bank of America and immediately drew down $7.8 million secured by a mortgage on the Chesapeake Belle. TBS said that advances drawn down under the credit facility will be used for working capital and to fund the purchase of additional vessels. The five year deal has heavy amortization of 50% during the first 2 years, 40% over the subsequent 2 years and the final 10% during the final year. TBS said in the a filing with the SEC that it will have the option of paying interest at Adjusted LIBOR plus 2.75% or 1.25% over a Base Rate.

Written by: carisk | Categories: Freshly Minted, The Week in Review | July 7th, 2005 | Add a Comment

TBS Offers Investors Superior Value

Following suit with Eagle and Aries, TBS International has cut the estimated price of its initial public offering to $11-$12 per share, down from $15-$17 per share, and maintained the volume at 8.5 million shares, 7 million of which are primary shares and 1.5 million of which are secondary shares. At the midpoint of the new price range, the IPO would raise $98 million. Joint bookrunners on the deal are Merrill Lynch and Jefferies & Company.

Although at first glance this might look like a bloodletting, we think the deal is still attractive to both the issuer and the investors. Here’s why: for the issuer, using a blend of the company 2004 and 1Q2005 EBITDA of $51 million on an annualized basis, a price of $11 per share values TBS at an attractive 5.2 times top-of-the-market EBITDA. For investors, from a cashflow valuation standpoint TBS’s planned vessel acquisitions amount to a purchase of more EBITDA that would nearly half the relevant valuation multiple. In the resulting neighborhood of 2-3x EBITDA, TBS post-acquisitions is set to represent a very good value vis-à-vis its shipping comparables, particularly considering the added value of the company’s established franchise, an item that many of the pure dry bulk plays making their foray into the U.S. equity markets do not offer.

Written by: carisk | Categories: Equity, Freshly Minted | June 23rd, 2005 | Add a Comment