The Week in Review – January 3, 2008

Two working days into 2008 the ship finance markets have been reasonably quiet. We would encourage those who haven’t yet to take the time to nominate their favorite deals for a Marine Money Deal of the Year Award at http://tinyurl.com/3yqewn. Being public, however, while having its fair share of costs and drawbacks,in these days of tighter credit continues to prove its value in terms of availability of capital. FreeSeas is a perfect example of the opportunities public status affords. Since netting $97 million in an October equity offering, the company has moved forward to acquire two 24,000 dwt dry bulk carriers, built 1997 and 1998, to be delivered in February and March of 2008 for $77 million. The deal was financed with a combination of cash on hand and bank financing and uses only about half the company’s available liquidity so further acquisition can be expected in the near term. The deal brought FreeSeas’ fleet from five to seven vessels and increased its tonnage by approximately 33%. At seven vessels with an average age of 14-15 years, it represents significant progress from where FreeSeas was just a year back, with two vessels built in the 1980s.

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