Freshly Minted – November 24, 1999

HIGH YIELD

STENA LINES AB

Battered but Proud

In a most widely anticipated bond holder meeting, Stena Lines’ Bo Severed and Svante

Carlsson came to New York and attempted to assuage concerns over the company’s direction which had become intense following a poorly handled 3Q conference call and a subsequent near 20 point drop in its bond price. The talk prior to the meeting Tuesday at Chase headquarters was all about management’s failure to understand its investors and a possible company decision to restructure. Holders flew in from around the country to listen.

While it was primarily one holders decision to sell that drove the price to the 50s, concern over the Scanlines acquisition and financing; poor transition performance during the end of Duty Free; and, fundamental concerns about the European Ferry business had created a stormy atmosphere.

The presentation was long and detailed and anticipated the issues well (even to bunkers being hedged 75% for 2000 and 50% for 2001!). But the presentation did not fully quell the concerns as question after question (almost 2 hours) pushed management on the issues of liquidity, Scanlines strategy, the speed with which the Duty Free hit might be overcome and really the company’s focus on its core business – Ferries.

This is only an excerpt of Freshly Minted – November 24, 1999

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