THE YEAR IN HIGH YIELD

By Jim Lawrence

High yield bonds have brought out the worst in the shipping industry; from affiliate transactions to dubious valuations, from threats to hide ships in unfavorable jurisdictions to partners backstabbing each other in greed. Not surprisingly, we’ve also seen some of shipping and the financial community’s most aggressive characters swarm around broken shipping deals like moths around a light bulb on a still summer night.

The last 24 months have been like a showcase of the ‘serious understanding gap’ which still exists between Wall Street and Shipping. It can also certainly be said that there is plenty of blame to go around: the capital markets promoters who performed questionable due diligence in their rush to market, the investors, who threw money at yields during those heady market days, owners who became inflamed by dollars, the advisors who promote the ‘bravado of process’ while fees mount up and up, and even the vultures who insisted ships are like strip malls continuously by misunderstanding the complexities of shipping as value eroded away. The Class of ’97-’98 bonds certainly damaged the fragile relationship between shipping and the capital markets, but not over the long term.

This is only an excerpt of THE YEAR IN HIGH YIELD

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