Freshly Minted – April 6, 2000

HIGH YIELD

Despite the fact that shipping issues continue to offer investors significant trading opportunities, interest in the sector seems to have waned in recent months. One reason for the lack of interest may be the fact that many distressed players jumped in too early and got skinned. Many of the most logical buyers of these bonds have already bought and are kicking and scratching just to get out whole. Patience Pays!

GOLDEN OCEAN

As we reported last week, as part of Frontline’s commitment to Golden Ocean of $5 million in DIP finance, the company has been granted 15 days from April 4th to perform exclusive due diligence on the Golden Ocean and examine a possible transaction. Having an “exclusive” period is typical for US industrial companies in bankruptcy, though the lock-up is typically 30 days. Here’s how it works: after the 15 day period expires, Frontline can choose to submit a plan of reorganization to Golden Ocean and its creditor committee. The proposal would outline what consideration creditors would receive (Frontline shares perhaps) if they adopt Frontline’s plan. If adopted, Golden Ocean will then bring the proposal to the US bankruptcy judge for review. At the same time, Frontline would submit a funding agreement contingent on a favorable ruling by the court. Mr. Fredriksen does not have the exclusive right to submit a plan of reorganization. Therefore, once the 15 day period expires, Messrs. Restis, Kollakis, Goymer, or anyone else, could submit an alternative plan for consideration. It is, after all, a free country. In our view, we would not be surprised to see Frontline submit a plan that is acceptable to Golden and its creditors. While Mr. Fredriksen is often criticized in the trade press, deep knowledge and serious analysis of his previous acquisitions indicates that is willing to pay fair value and that he honors contracts and obligations to the letter.

MILLENIUM SEACARRIERS

Perhaps following in the footsteps of Bill Livanos who resigned from Millenium to join MaritimeDirect, fellow Millenium director Manny Kiprios has established a dot com venture of his own, OSI Investments. In other Millenium news Wayland Investments is playing hardball with Millenium for an allegedly shorting bondholders on their coupon payments. We provide the original Exhibit D at the bottom of this issue of FM for your review. It should be noted that if Wayland is an original holder (not clear from the letter), they have the additional remedy of suing “on the indenture.”

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