Rickmers Maritime Trust

[tanjm]

ESTABLISHMENT OF S$300,000,000 MULTICURRENCY MEDIUM TERM NOTE PROGRAMME

http://infopub.sgx.com/FileOpen/RM_SGX_A...eID=265083

Maybe this could be used to refinance the secured debt or finance acquisitions of new vessels ?

(Not Vested)

This is most interesting for a variety of reasons.

The first is that RMT must be really rueful over their original financing decision which saw them borrowing at libor+ and then hedging and locking in a effective interest rate of 5+%. They are likely wanting to be issuing fixed rate bonds at a low rate before they go up.

The second is that RMT must think they are able to find buyers of the notes (which would non-bank customers who need to be woo'd to take up the notes) at a decent interest rate. That itself is telling about sentiment or that there's too much cash floating around or both.

[Snoopy168]

For Q4 2013, Div declared : US$0.006
XD : 11 Mar 2014
Paid on 27 Mar 2014

[greengiraffe]

Container ship operator Rickmers' profit falls
Published on May 3, 2014 1:21 AM


Lower fleet utilisation and reduced charter rates dampened revenue for Rickmers Maritime in the first quarter. -- PHOTO: RICKMERS MARITIME

By Mok Fei Fei

LOWER fleet utilisation and reduced charter rates dampened revenue for container ship operator Rickmers Maritime in the first quarter.

Distribution per unit was flat at 0.6 US cents in the first quarter, its trustee-manager reported yesterday. Net profit fell by 8 per cent to US$9.85 million (S$12 million) for the three months to March 31, with charter revenue down 4 per cent to US$33.9 million.

Two of its ships had been repositioned in preparation for their new deployment for a major client, Maersk Line, the world's largest container shipping company.

Another ship was idled due to engine problems, causing fleet utilisation in the first quarter to fall to 94.3 per cent.

Vessel operating costs also went up, 13 per cent ahead at US$9.9 million.

Rickmers said this was mainly due to expenses for the repair of the ship with the engine problem, as well as higher bunker fuel costs needed to reposition the two ships.

The new charters with Maersk for a minimum of 12 months to a maximum of 24 months have commenced, helping Rickmers' fleet to reach a 98 per cent utilisation rate.

The trustee-manager said in a statement that the new charters give it good earnings visibility for the year ahead.

But it warned of troubled waters, with a significant number of new ships scheduled for delivery over the next 12 months.

That would add to the prevailing level of structural oversupply, which the trustee-manager said "is likely to outstrip demand in the near term despite an increase in the scrapping of existing ships".

Mr Thomas Preben Hansen, the chief executive of the trustee-manager, said: "Whilst the charter market remains under pressure (from) the persistent oversupply of container ships in the market, Rickmers Maritime's performance has been consistent due to its existing charter agreements with reputable counter parties."

The declared distribution will be paid on June 4.

Rickmers units closed up half a cent to 29.5 cents yesterday. It reported its earnings after markets closed.

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[Nick]

Results within expectations. As mentioned earlier in this thread, I expect further weakening of the cash generating profile if rates remain depressed since the long term charters steadily matures from 2014 onwards.

(Not Vested)

[Porkbelly]

They are issuing bonds now. 8.5% 3years ( 2014-2017)
Money is tight, they look for retail investors...

[tanjm]

I speculate they are raising this to retire existing loans, which have onerous LTV restrictions. Those restrictions include limiting the dividend cashflow.

[Nick]

http://www.tradewindsnews.com/finance/33...bond-issue - Article

I don't think the current loans attract such a high interest. Could this be a prelude for financing new vessel acquisitions ?

(Not Vested)

[brattzz]

They are issuing bonds now. 8.5% 3years ( 2014-2017)
Money is tight, they look for retail investors...

quite desperate? Mmm... :O

[tanjm]

http://www.tradewindsnews.com/finance/33...bond-issue - Article

I don't think the current loans attract such a high interest. Could this be a prelude for financing new vessel acquisitions ?

(Not Vested)

The current loans are about 5%, factoring in the interest rate swaps. But they come with a set of restrictions by the bankers - basically they control what RMT can use the cash for.

The 8.5% is probably a truer statement of their perceived credit risk right now for unsecured debt.

They are probably doing this to free up the current restrictions on what they can do with the business and/or cash. The last time I checked, I think dividends only made up about a quarter of the distributable cash. Make your own mind up what that reason is.

[HoleinOne]

There are two more vessels due for renewal of contract for 2014. According to the spot rate the rate will be about US$8.5k per day per vessel instead of the US$26K formerly. Multiply by 360 days and subtract the difference, the amount is a reduction of US$6.3mil per year or US$1.575mil per quarter per vessel or US$3.15mil for the two vessels. This will be reflected in the revenue and directly affect the profit. The management had been actively trying to pay down the loans and reduce the interest repayments. Finance expenses had been reduced by $12 mil (2013 -2012) or $3mil per quarter and is ongoing. Also with the issue of the $100 mil note, there is a further reduction in the amount of the loan and a payoff of the convertible loan of US$49 mil which Polaris accepted with a 20% discount of US$11 mil which will be reflected in the account in the 3rd quarter. In 2015 there are 5 more vessels due for lease renewals, which will likely add pressure to the revenue and profit given the state of the container leasing market unless we have a sudden turnaround in world trade. Taking the reduction of US$6.3 mil per vessel or US$30 mil for the 5 vessels, the Trust may end up with zero profit. So you decide if u want to keep the stock.[/size][/font]