Debt in Drag

by Nicolai Heidenreich

Finally, we thought, shipping and capital markets would once again be joined through the holy matrimony of a new issue and not through the second marriage of a high yield restructuring. It would be a white wedding, we thought, involving the public equity of a reputable industrial container feeder operator as the bride. The structure was solid and creative, and we were very happy to hear festive jargon like “roadshow” and “underwriting fees” once again muttered under the breaths of shipping financiers everywhere.

Like every relationship, there were a few bumps along the road. Back in February, we heard the deal was a $200 million IPO structured around 12 vessels and a 10-year management structure. Then, we understood that the deal had been reduced significantly. Next, that the roadshow had been extended, and we got worried. In early May the announcement came: the groom had left the bride at the altar.

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