Freshly Minted – April 29, 1999

HIGH YIELD

ALPHA

After taking a closer look at the Alpha 6K, it has become clearer to us why CSFB was willing to take the role as a white knight. We understand that CS has a cost basis on its Alpha bonds of around 28 cents. Unlike many reports no cash offer has been made to the bondholders holding the remaining 25% but we would not expect CS to pay any more than 25cents. If they can tender for all of the bonds at 25 cents their cost basis comes down to 27cents. From there it is only a quick calculation to see that CSFB will stand to earn $17.5 million as soon as Mr. Economou has the bank financing to buy the fleet back. We think he does.

$17.5 million or not, CSFB are not in this to become shipowners and would not act as a “trading post” unless Mr. Economou could guarantee that the option would be exercised. Mr. Economou has also ensured himself a $3.0 million success fee, if he, as the company’s financial advisor, manages to restructure the original issue.

Read our May hard cover issue for a complete analysis of the Alpha restructure as well as a detailed look at the Colombia IPO. The issue also includes 2 years of historic ship mortgages, a complete directory of 85 Maritime Financial Institutions, as well as all the high yield analysts and issuers.

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