Freshly Minted – April 22, 1999

HIGH YIELD

Slow week due to Bear Stearns high yield conference which pulls a lot of high yield people out of the office. Enterprises Shipholding was the only shipping credit that presented.

ALPHA

Alpha Shipping has filed a document with the SEC which outlines a proposed restructuring plan. In a nutshell, bondholders will be given the choice of taking 37 cents in cash or receiving an equity stake in a new company. It appears that CSFB is providing the financing. Bondholders will hold 100% of the equity in the new company. Mr. Economou has the option of purchasing the ships back for $64.75 million. Last week Alpha put its 7 ship reefer fleet up for sale through Klaveness in Oslo.

PACIFIC & ATLANTIC

Pacific and Atlantic has stated that the company will not meet its May 31st coupon of $7.4 million from earnings. To quote the company’s 20-F “based on current levels of freight revenues and anticipated market conditions, the company expects that its liquidity requirements for the next 12 months will not be met by cash flow from earnings of the vessels. The company is currently involved in discussions with its underwriters in order to meet its short and long term liquidity requirements. The Company’s shareholders have expressed a willingness to continue to support the Company with additional financing subject to a reasonable solution to the company’s liquidity problem. There can be no assurance that such financing will be available until a solution is found.” The “contingent” language sounds a little like the PanOceanic situation in that the sponsor will only put money into the deal if bondholders agree to something in advance.

This is only an excerpt of Freshly Minted – April 22, 1999

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