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Just as we were ready to publish, DHT Holdings and Teekay Tankers announced follow-on equity offerings. DHT intends to offer 8 million shares and will use the proceeds, approximately $40 million based upon today’s closing price, for general corporate purposes. The joint bookrunning managers are UBS, BofA Merrill Lynch and Citi. Dahlman Rose will act as Co-manager and Carnegie as sales agent in Scandinavia.
Monkey Off Their Back
After innumerable waivers, TBS International plc, at long last, announced that it has entered into amendments to its credit facilities with all of its lenders. The amendments restructure the Company’s debt obligations by revising the principal repayment schedules under the Credit Facilities, waiving any existing defaults, revising the financial covenants, including covenants related to the Company’s consolidated leverage ratio, consolidated interest coverage ratio and minimum cash balance, and modifying other terms of the Credit Facilities.
The Other 49%
Teekay Offshore Partners is in the process of considering Teekay Corporation’s offer to sell it the remaining 49% interest in Teekay Offshore Operating L.P. (“OPCO”) that it doesn’t own. Payment would be made in a combination of cash and Teekay Offshore common units. No new units are expected to be sold to the public to finance this transaction.
OPCO currently operates a fleet of 33 shuttle tankers, of which five are chartered-in, four FSO units, nine double hull oil tankers and two lightering vessels.
Like a Good Neighbor, MSC Is There
The power of relationship cannot be overstated. Mediterranean Shipping Company S.A. (“MSC”) and Costamare Inc. have worked together for years and have developed the archetypical relationship between tonnage supplier and liner company. It is a symbiotic relationship with each party benefitting, Costamare provides tonnage as needed, while MSC provides the long-term time charter which provides an additional backstop to the build to order vessel.
Skunked in New York, Success Outside
Having been unsuccessful in New York in its efforts to sell up to $400 million of ten-year senior unsecured notes in December, Ship Finance International Limited played it safe and stayed closer to home in its latest capital raising effort. The earlier effort, which was tied to a tender offer for its 8.5% Senior Notes due 2013, was stymied by weakening market conditions in the debt capital markets due to the sovereign debt issues in Ireland. Although investors pulled back from the new issue market, the Ship Finance story, we understand, was well received. In concluding our story, we wrote: “Now more than ever, in a world where information flows at the speed of light, it is not merely fundamentals that determine your future, but macro events as well. A quiet news week may be just what the doctor ordered.”
The Birth of A Mega Ship FunD – Sovereign (and Public) Equity Award
By Rodricks Wong
On 29 December 2009, a group of investors in China celebrated the inauguration of China Ship Fund (“CSF”) and set sights to grow this shipping fund to RMB 20 billion (USD 3.1 billion) over the next few years. This would be Tianjin city’s second major fund, approved by State Council and the National Development and Reform Commission of China.
Following the inauguration, within a short period of one year, CSF signed shipbuilding contracts for 45 vessels with total investment amounting to over RMB 15 billion (USD 2.3 billion) and is well on track to become a major tonnage provider in China over the next couple of years. Supporting this growth was China Development Bank (“CDB”), which also has a growing ambition to be a major ship financier in China, and has committed USD 1.1 billion to CSF for the acquisition of 30 dry bulkers – 10 capesize, 10 post panamax and 10 supramax vessels. CDB itself has accumulated shipping assets of RMB 26 billion (USD 4 billion), and committed USD 3.3 billion of new money to the shipping sector in 2010.
Shanghai Greenland Energy (Group) Co. Ltd RMB Financing – Editors’ Choice East
By Rodricks Wong
Sometimes a transaction is amazing because in builds on the top of other transactions, long standing relationships and rides an upward market trend into a tremendous show of nearly earth shattering proportions. Other times a transaction merely wedges open a door that was formerly shut, allowing a trickle of light to shine on the costs and benefits of a new way of doing things. This particular deal fits into the latter category; modest in size it crossed other barriers that could have greater implications for the market going forward.
Editor’s Choice Awards West
By George Weltman
There were many non-conforming transactions that came to our attention. They spoke to us differently from our traditional winners. Perhaps it was a different way of looking at things, a new twist, a trend, a lesson learned or simply something buried.
For us, it is the best part of the issue, as we get to use our imagination and have total discretion to recognize what might be lost as mere background noise. And, most importantly it is fun. What follows are this year’s Editor’s Choice Awards.
The Bankers’ Broker – Contribution to Ship Finance
By Peter Mellet
Editor’s Note:
There are some people whose contribution to the industry seems today unremarkable, but at the time was earth shattering. With the passage of time, it became part of the natural order of things; an item to be checked-off. Graham Barnes contribution to the marine insurance business and to ship finance in particular aptly fits this description.
To get a true sense of the person and his accomplishments, we have asked the person who nominated the winner and therefore knows him best to write his professional “eulogy”. What follows is Graham Barnes story as told by his colleague, Peter Mellet.
On a personal note, we can affirm that Graham’s contribution was for us “priceless”. With the assistance of his firm and Peter in particular we are one of a handful of insured’s who collected on a MII claim. The approximately $500,000 we collected made a near total loss palatable and us heroes in the eyes of management.
“We are the ones that need help with insurance!” said a banker hit by the 1975 shipping crash. “What is the use of this so called Swedish Mortgagees Interest Insurance wording conditional upon a final court judgment?” “It’ll take the bank at least four years to get a negative judgement against the owner’s underwriters that could cost the bank more in legal fees and associated costs than the potentially recoverable claim!”
Saluting a Giant – Contribution to Ship Finance: Carl E. Steen, Head of Shipping, Oil Services & International Division, Nordea Bank
By Jim Lawrence
Carl E. Steen is retiring as Head of Shipping, Oil Services & International Division in Nordea Bank in Oslo which he has headed since in effect since 1993 in 2011. He leaves a legacy of powerful support of the shipping and offshore industry, a legacy that leaves Nordea in the envied position as critical lender to the industry.
Nordea’s loan portfolio to the maritime sector, including oil services, stood at about 13 billion euros (US$18 billion) in 2009 – just above 2 per cent of the bank’s total portfolio, really today the perfect size to enable deals and stay clear of any concerns of an over focus.
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