The Editor is High

Whilst we know its summer in Surfers’ Paradise, Buenos Aires and Cape Town, the winter of 2003 has been particularly memorable at our headquarters near New York for the weather. Snow and cold and then even more snow in an unrelenting attack.

Equally unrelenting is our little corner of the world in ship finance. Since December 15, 2002, NYSE listed tanker companies have raised $1 .64b in new funds to finance what is largely consolidation in the industry and not for new tonnage. But others, like OMI, are refinancing and sandbagging the balance sheet to get stronger in a market that looks as if it cannot last, instead of getting bigger and more leveraged. Which strategy will win? Well, there are lot of theories out there and all are right in some respects but the best answer is that no one really knows. The world is just too uncertain. Activity has not just been in tankers. Sinotrans, the Chinese version of United Parcel Service and the old Sea-Land combined, hit the market with a $450m IPO with Credit Suisse and BOC International. It’s oversubscribed and up on the issue date. RCCL is out to replace their $1 bn revolver with a ‘best efforts’ of the same size with Citibank, Nordea and Dnb.

Indeed many bankers have indicated to this editor it’s the best in a while in terms of opportunities. Said one, “Last year you (the bank) had to grab onto whatever you could get and hope that you did not lose it, because if you did you would have a bad year. This year the bulls-eye is much easier to discern and the chance for many to have a good year, is not only excellent, its downright likely.”

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