Nordic American Raises $173 million,

JP Morgan Bearish

Nordic American Tanker Shipping priced it’s 3.5 million share follow-on offering today at $49.50 per share, raising $173 million not counting 545,000 shares reserved for over-allotments. Bear, Stearns & Co. and UBS investment Bank are acting as joint bookrunning managers on the deal while DnB NOR Markets is serving as co-manager. The proceeds from the deal are to be used to repay any amounts borrowed under the company’s senior secured credit facility and to go towards the price of two suezmax tankers that NAT had previously agreed to purchase.

Early in the morning of the day the offering priced, JP Morgan issued research reports initiating both Nordic American and fellow tanker yield-play Knightsbridge as Underweight.

Nordic American Tanker Shipping priced its 3.5 million share follow-on offering today at $49.50 per share, raising $173 million not counting 545,000 shares reserved for over-allotments. Bear, Stearns & Co. and UBS Investment Bank are acting as joint bookrunning managers on the deal while DnB NOR Markets is serving as co-manager. The proceeds from the deal are to be used to repay any amounts borrowed under the company’s senior secured credit facility and to go towards the price of two suezmax tankers that NAT had previously agreed to purchase.

Early in the morning of the day the offering priced, JP Morgan issued research reports initiating both Nordic American and fellow tanker yield-play Knightsbridge as Underweight.

Nordic American Files to Issue Another

3.2 million  Shares

Buy ships with debt and backfill the purchase through a secondary stock offering – that is the strategy being used by Nordic American Tanker Shipping (NATS), and so long as the equity market remains open, it’s a system that works for everyone, including the serial underwriters who are paid a 6% gross underwriting spread on the follow on deals.

In the most recent development, NATS announced on Wednesday yet another share offering pursuant to the company’s effective shelf registration statement. Repeat joint bookrunning managers Bear, Stearns & Co. Inc. and UBS Investment Bank, along with co-manager DnB NOR Markets, Inc., are selling an additional 3,500,000 common shares, with underwriters granted an option for an additional 525,000 shares to cover over-allotments. Proceeds are likely to amount to $200 million less fees. The new deal will substantially increase the 9.1 million shares currently outstanding.

The company’s plan is to use the proceeds of the offering in the financing of two double-hull suezmax tankers, to be delivered in March 2005, that Nordic American has already agreed to acquire for a purchase price of $149.3 million. Specifically, NATS plans to repay $5.0 million that it has borrowed under an existing credit facility led by DnB Nor for this purchase and to pay the remaining $130.3 million balance on the ships. According to the company, the any leftover funds will be used for general corporate purposes, including repayment of indebtedness and future vessel acquisitions.

Buy ships with debt and backfill the purchase through a secondary stock offering – that is the strategy being used by Nordic American Tanker Shipping (NATS), and so long as the equity market remains open, it’s a system that works for everyone, including the serial underwriters who are paid a 6% gross underwriting spread on the follow on deals.

In the most recent development, NATS announced on Wednesday yet another share offering pursuant to the company’s effective shelf registration statement. Repeat joint bookrunning managers Bear, Stearns & Co. Inc. and UBS Investment Bank, along with co-manager DnB NOR Markets, Inc., are selling an additional 3,500,000 common shares, with underwriters granted an option for an additional 525,000 shares to cover over-allotments. Proceeds are likely to amount to $200 million less fees. The new deal will substantially increase the 9.1 million shares currently outstanding.

The company’s plan is to use the proceeds of the offering in the financing of two double-hull suezmax tankers, to be delivered in March 2005, that Nordic American has already agreed to acquire for a purchase price of $149.3 million. Specifically, NATS plans to repay $5.0 million that it has borrowed under an existing credit facility led by DnB Nor for this purchase and to pay the remaining $130.3 million balance on the ships. According to the company, the any leftover funds will be used for general corporate purposes, including repayment of indebtedness and future vessel acquisitions.