2007

Deutsche Sole Book on Extraordinary Excel Maritime Convertible Bond Issuance

Deutsche Bank Securities successfully sole managed yesterday’s extraordinary Excel Maritime convertible senior notes transaction. This is a very important transaction for ship owners, public owners particularly, coming as it does in the midst of continuing bank liquidity uncertainty caused by the US sub prime credit crunch. At a time when syndicated loans are struggling to find participants, and some banks have completely halted new business due to marginal funding cost increases or are offering new loans but only at much higher rates, Excel Maritime has secured $125 million (potentially up to $150 million if the $25 million greenshoe is exercised) that will pay interest semiannually at a rate of 1.875% per year. The convertible notes are due 2027, are non-callable by the company for seven years and are puttable by investors back to the company in years 7, 10 and 15.

The Deutsche team of Craig Fuehrer and Andrew Apthorpe on the convertibles desk delivered seven year equivalent fixed rate unsecured funding for Excel Maritime at a floating rate equivalent of LIBOR – 310 financing. The notes will be convertible at a base price of approximately 10.9529 shares of Class A common stock per $1,000 principal amount of notes. The initial conversion price is set at $91.30 per share. There is also an incremental share factor of 5.4765 shares of Class A common stock per $1,000 principal amount of notes.

The notes will be convertible into cash, shares of Excel’s Class A common stock or a combination of cash and Class A shares at Excel’s option.

This is only an excerpt of The Week in Review – 10/04/2007

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