A Full Forward Calendar (of restructurings)

The high yield market may be open again but, for most shipowners, the land of big chunks of non-amortizing debt will permanently reside in the eerie twilight between dream and nightmare. The week that we went to press, inflows were $740 million and seven new deals, none in shipping, were priced, though it would have to be a pretty clean shipping deal to get done amidst the present wreckage. While there is a flurry of activity around deals that appear set to default, very few bonds are trading, and sellers continue to outnumber buyers.

Despite the dearth of new shipping deals, the forward calender is full – of restructurings that is. The same cast of characters that put many of these deals together has shifted its focus on how to take them apart. No matter what your sector or capital structure, 1999 will most certainly be the year of the restructuring and, even despite the lack of principal repayments, high yield is no exception. The question is: can all the king’s horses and all the king’s men put some of these thin companies back together again? The answer is that, for a fee, anything is possible. As for the investors, those with good research and a hearty appetite for risk will find the secondary market for shipping issues an absolute playground in 1999. Jefferies has emerged as the newest player in shipping restructuring, with various market sources telling us that they are working on Ermis.

This is only an excerpt of A Full Forward Calendar (of restructurings)

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