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Blowout!
As a seasoned issuer, Teekay Corporation wasted no in pricing what was expected to be $300 million of senior unsecured notes due in 2020. On Friday, not only did they announce highly competitive pricing, but also that the offering had been upsized by 50% to $450 million.
With a coupon of 8.5%, the deal was priced at 99.181% to yield 8.625% or 492 bps over like term Treasuries. Details of the transaction are shown in the Guts of the Deal below.
Citi and China Exim Support Toisa
While we are still on the subject of Chinese banks’ strong support for domestic shipyards, China Exim Bank has joined hands with Citigroup to provide offshore owner Toisa limited with a structuring financing solution of up to 10 years. USD 127 million of debt will be used to finance three anchor handling tug supply vessels (AHTS) and one platform supply vessel (PSV) ordered at Wuchang Shipyards. Wuchang Shipyards is one of the key shipbuilding units under the state-owned shipbuilder China Shipbuilding Industrial Corporation. Continue Reading
Swap to Extend
On Tuesday, Teekay Corporation announced a cash tender offer for all of its outstanding 8.875% Senior Notes due 2011. As of December 31, 2009, $176.6 million aggregate principal amount of these notes were outstanding. The total consideration for the tender offer will be $1,078 per $1,000 principal amount, consisting of a tender offer premium of $60 and a consent payment of $18 for early tenders. The offer, managed by J.P. Morgan, is scheduled to expire February 9th.
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Not to Be Outdone
Navios Maritime Partners announced after the market closed Wednesday that it intended to issue 4 million common units with a green shoe of 600 thousand units. Proceeds would be used for fleet expansion and/or general partnership purposes. The deal was priced today at $14.90 per unit, a discount of 5.8% from the prior close.
Joint book running managers were Citi and JPMorgan with S. Goldman Advisors, DVB and Cantor Fitzgerald serving as co-managers.
Teekay LNG goes to the Shelf
Having filed its F-3 shelf registration on October 20th (effective on the 29th), Teekay LNG Partners wasted no time and announced on Monday the offering of 3.5 million common units with a green shoe of a further 525,000 shares. On Tuesday the company announced that the shares were priced at $24.40, which is a discount of about 5% to Monday’s close at $25.67 just before the announcement.
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All Eyes Are On Genmar
We know that General Maritime’s dynamic duo, Messrs Georgiopoulos and Pribor are on the road marketing their $300 million senior unsecured notes offering due in 2017 and so, while they are busy selling we thought we would take a read of the high yield market.
Earlier this week, Navios Maritime Holdings closed its successful $400 million private offering of first priority ship mortgage notes due in 2017. Rated BB-/Ba3, the coupon on the notes was 8.875% and was priced to yield 9.125%. The company escrowed $105 million of the proceeds to provide additional financing to complete the purchase of two new vessels with the balance used to repay existing credit facilities.
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Despite Its Ups and Downs, It Really Has Been a Good Year
We are frequently guilty of focusing on each day or deal as it comes and often lose sight of the whole. And, so we were pleasantly surprised by a collection of data, which put his year’s capital markets activity in context and reminded us of the resilience of our industry. With bank lending at a nadir, it fell to the investment bankers to fill the void, which they have tried to do mainly with follow-on equity offerings and lately with the return of high yield. Neither is a perfect substitute for low-cost bank debt given size limits, cost and dilution, but it is all we have.
As writers, we are not big fans of PowerPoint, in general, but often there is a slide or two that reminds us that a picture is worth a thousand words. Such was the case in the presentation made by Anup Mysoor of Citi at our recent conference in Busan.
From Mr. Mysoor’s presentation we have chosen three slides that we think demonstrate where we are today and what has been accomplished to date.
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One Step Forward One Step Backward and One Tentative Step….
Danaos Corporation reported this week that it had now obtained waivers from all its lenders covering all the prior breaches of financial covenants in its credit facilities as well as any subsequent breaches until October 1st 2010.
Less positive was the news that Zim Integrated Shipping Services stated that it is reducing unilaterally all of its long-term charter payments by 35% commencing September 1st for a period of 3 years. Danaos, which has 6 vessels on charter to Zim for 12-year periods, has not accepted this condition nor has it acquiesced to this reduction. The company is currently in discussions with Zim and is evaluating the situation.
Back to the Well
Utilizing its $500 million shelf registration from February, Navios Maritime Partners (“NMP”) went back into the market last week for its second follow-on offer of this year. In May, NMP issued 3.5 million shares at a price of $10.32. Last week’s offering of 2.8 million shares was priced $12.21 per share a discount of 6.5% from the prior day’s closing price. Proceeds will be used to fund its fleet expansion and/or for general corporate purposes.
Euroseas and Citi Join Forces
About two weeks ago, Euroseas, utilizing its existing shelf registration, entered into a continuous offering program equity distribution agreement (“COPED”) with Citi to sell up to 7 million shares of common stock from time to time through Citi as a sales agent. Under the terms of this equity distribution agreement, Citi may act as a principal and purchase shares at a price agreed upon at the time of sale. For its services Citi will be paid a commission of 2% of the gross sales price. Proceeds will be used for general corporate purposes and to fund vessel acquisitions.
Since the transaction was announced on September 4th, the share price has steadily risen from $4.40 to 4.76 on average volumes of about 96,000 shares.
The Official Guide To Marine Finance Providers
