2007

Storm Insurance or Eagle’s Umbrella

Today in its 2nd Quarter conference call, Mr. Zoullas disclosed that Eagle Bulk had arranged credit insurance, through Seacurus Limited, which secured the company’s charter revenue stream for three years, through July 2010 with a credit risk underwriter, rated A by S&P and A2 by Moodys. The agreement is confidential however we have extracted from an article that Nick Maddalena, a Director of Seacurus, wrote for us last autumn an explanation of this product for our readers, which we hope was the inspiration for Mr. Zoullas:

“There is however one solution in the face of such uncertainty: protection is available to those owners with vessels on long term time charter in the form of a credit insurance product. CharterSEACURE has been launched by specialist marine insurance broker Seacurus. The insurance provides an indemnity against loss of hire resulting from a default by the vessel’s charterer. CharterSEACURE protects the owner against unpaid invoices, the cost of laying up the vessel between charters and most importantly (from a revenue forecasting perspective) any shortfall in hire realised at re-fixing. The benefits of the cover are threefold: firstly, the cover provides the insured with peace of mind in a market downturn. Secondly, it promotes investor confidence by ensuring that unforeseen impacts to the revenue stream have been protected. Thirdly, if banks are included as loss payee under the policy, the policy can be viewed as an additional form of collateral with the associated benefits.

This is only an excerpt of Market News & Commentary – 08/09/2007

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