Home About UsPublicationsForumsConsultingContact Us
Back to Earlier Search Results New Search Logout

Links

CMA Shipping 2011

Marine Money Forums

Marine Money Asia Week

Freshly Minted Newsletter

Marine Finance Dashboard

Eagle Bulk Shipping – All About the Arbitrage

By Matt McCleery

It’s all about the arbitrage these days.

What we mean by this, of course, is the fact that ships have a higher value on Wall Street than they do in the shipping markets – and not surprisingly there is a steady stream of people looking to capture the difference.

It depends on the age of the vessels, of course, but on average a shipowner can buy a middle-aged vessel at about four times cash flow and sell it to Wall Street investors for about six times cash flow – much more if the company is valued based on its dividend yield.

Here’s where the rubber meets the road: by valuing shipping companies using a multiple of their cash flow generation, issuers of equity can effectively sell their vessels for 1.5-2.0x their value in the sale and purchase market. It is a truly remarkable moment in the evolution of shipping and the capital markets – and not surprisingly the Delta flight between Athens and New York is once again being seen as a direct journey to wealth and early retirement for shipping dealmakers.

This is only an excerpt of Eagle Bulk Shipping – All About the Arbitrage

Content is restricted to subscribers. To continue reading please Log-In or view our subscription options.

Existing Users Login

Username
Password
 


Related Archive Files

  • No Related Post

Written by: | Categories: Marine Money | April 1st, 2005 |

Tags:

Leave a Reply

You must be logged in to post a comment.

Copyright 2008. Marine Money. All Rights Reserved.