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Seeing Value – SEACOR & Whippoorwill Acquire Trailer Bridge
Having previously acquired more than 90% of the $82.5 million 9.25% Senior Secured Notes, SEACOR Holdings, Inc. and Whippoorwill Associates, Inc. reached an agreement this week with Trailer Bridge, Inc. on a plan of reorganization which would allow the company to emerge from Chapter 11 by the end of March 2012. Clearly, this was a highly successful process with the resolution agreed approximately 60 days from the date of filing on November 18, 2011.
TORM Receives a Reprieve
With its temporary deferral and covenant standstill expired as of January 15th, TORM announced on Wednesday that the temporary bank agreement was extended until February 15th allowing just under a month for the ongoing negotiations to be consummated.
OSG Downgraded
In a brief note published on Tuesday, Michael Webber of Wells Fargo reported that S&P had downgraded its credit rating for OSG to B- from B with a negative outlook. S&P cites a continued weak earnings outlook, driven by a weak tanker market and the potential for constrained liquidity with OSG’s $900 million forward start facility replacing its existing $1.65 billion revolver in February 2013. “While at this point we do not believe the downgrade will have an immediate, meaningful balance sheet impact, we view it as an incremental negative as OSG looks to finalize its two tranches of Title XI financing and exercise the accordion feature on its unsecured credit facility (which could increase the facility to $1.25 billion).”
Teekay Offshore Heads to Norway for Debt
The last time Teekay Offshore Partners L.P. visited Oslo in November 2010 it issued NOK 600 million in senior unsecured bonds due in 2013. The payments were swapped into a USD fixed-rate coupon that equated to approximately 5.75% per annum.
In this latest issuance, the company also sold NOK 600 million, the midpoint of the proposed range (NOK 500 – 700 million), of non-callable five-year senior unsecured bonds which were priced at a floating rate of NIBOR + 5.75%, at the wide end of the range. Similarly, the company intends to swap all interest and principal payments into U.S. dollars. Proceeds of the offering will be used for general partnership purposes. Like its predecessor, the offering contains a minimum liquidity covenant requiring that Free Liquidity and undrawn commitments under revolvers of a minimum of $75 million and the aggregate of such Free Liquidity and undrawn commitments shall not be less than 5% of Total Debt. Details of the transaction are shown below in the Guts of the Deal.
Syndicated Market Continues on Track
Last Friday, Dealogic released its Bookrunner and MLA Tables for Syndicated Marine Finance Loans for 2011 showing total syndicated loan volume at $68.4 billion up from last year’s $50.1 billion. From the macro perspective the trend remains upward as deal volume and number of transactions grew respectively 26.2% and 19.6% compared to the year earlier. This continues the growth which commenced in 2009. Ignoring the boom in volume in 2007 and 2008, the current volume is on par with the years prior. A further measure of the health of the syndication market is also reflected in the nominal reduction of club deal volume as well as the declining proportion of these deals versus total syndicated volume. This is best seen pictorially in the graphs below.
AMA Gains Toehold in Germany – Acquires 49.9% of Lloyd Fonds
In our catch-up last week, we missed the news that Lloyd Fonds AG had successfully completed its equity issue with full subscription rights. In an offer that was underwritten by AMA Capital Partners, a total of EUR 14.7 million was raised based upon the issuance of 14.7 million new shares priced at EUR 1.00 each. AMA subscribed to 13.7 million shares with the existing shareholders acquiring the balance. As a consequence AMA holds a 49.9% interest in the company which will expand its supervisory board to six members of which three will be nominated by AMA. Of the total proceeds EUR 10 million will be used to settle its contingent liabilities towards the banks likely resulting from pre-delivery equity financings. AMA is now an insider giving them a leg-up over their competitors in getting a first look at opportunities in Hamburg.
New Odfjell Terminal Joint Venture in China
Continuing its focus on the terminal business, Odfjell SE announced on Wednesday its agreement to enter into a joint venture with Tianjin Economic-Technology Development Area (“TEDA”) to develop a terminal and marine facilities for bulk liquid chemicals, petroleum products and gases in the Nangang Industrial Zone (Tianjin) in China.
Diana Containerships’ Sale-leaseback with APL
On Monday, Diana Containerships Inc. announced that they had purchased the M/V APL Sardonyx and the M/V APL Spinel, both with a capacity of approximately 4,750 TEUs, for $30 million each. The vessels were built in 1995 and 1996 respectively at Samsung Heavy Industries. Delivery of the vessels is expected to take place this quarter.
Restis Steps Up and Banks Cooperate – Seanergy Amends Facilities
On Monday, Seanergy Maritime Holdings Corp. announced that two of its lenders had agreed in principal to waive certain financial covenants in three of its loan facilities and to amend the terms of two of its facilities. Giving comfort to the lenders was the main shareholder’s decision to inject $10 million of new equity.
Rewarding Shareholders – Seaspan’s Tender Offer
Today, Seaspan Corporation announced the preliminary results of its tender offer which expired yesterday, for the purchase of up to 10 million of its Class A common shares at $15/share. Not surprisingly, given the premium offered, the offer was a huge success with 21.3 million shares tendered. Based upon the terms of the offer, which gives Seaspan the right to increase the number of shares purchased by 2%, the company expects to purchase 11.3 million shares for a cash outlay of $169.5 million. The acquisition of the 11.3 million shares, which represents approximately 16% of the common shares outstanding, will reduce the share count to 58,367,460 shares. As a consequence of the oversubscription, the company expects purchase the shares from each tenderer on a prorated basis, which is estimated to be 53%. Citigroup acted as dealer manager of the tender offer.
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