FOR MOST OF the past six years the shipping industry
was holed below the waterline and sinking fast, making it a
sector to avoid in debt capital markets. But recent bond
issues by shipowners and operators have helped rehabilitate
an industry renowned for its extreme and unpredictable
economic cycles.
Container company CP Ships kicked things off last year when it
raised $250 million through an offering of 10-year senior notes. In
March 2003, oil tanker company General Maritime Corporation priced
a private offering of $250 million in senior notes. Another tanker
company, Overseas Shipholding Group (OSG), priced a $200 million
senior unsecured notes offering in the same month. France's largest
container company, CMA CGM, closed a e100 million high-yield bond
offering on May 15 - the first euro-denominated high-yield issue by
a shipping company.
The industry needs new money to fund consolidation and to
replace ageing fleets. Financially strong companies are buying...
