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Global Ship Lease, Inc. Message Board

  • edgetrader2001 edgetrader2001 Aug 9, 2011 10:57 AM Flag

    DAC vs. GSL

    Really interesting that DAC has recouped all of yesterday's losses while GSL is languishing. Goes to show how inefficiently priced these markets are. As we've discussed here in the past, DAC has enough exposure to CMA CGM to virtually put their equity at identical risk to GSL's (given the leveraged business model). In fact they are likely at greater risk given that CMA doesn't own just under half of them....

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    • That's very interesting and adds all the more curiosity to the comparison. With no word from GSL on the ZIM ship financing and the option window now rapidly closing, I wonder if Mr. Market is pricing in some misunderstood perceived risk with GSL regarding the deal. Anyone want to offer a prognostication on Monday's call? I would expect Ian will either have news about the financing (pro or con, but he needs to address it for sure), or will get some very harsh critique from DR (and others?). I'm having a difficult time understanding the market's response to GSL's ongoing state of torpor here (yes, Cours, that was for you). Is it all lack of dividend news related? That seems to be the theme over at CRU, SFL and FRO. Anyone hearing any concerns coming out of CGM that re-opens the counter-party issue? I would be willing to buy one last tranche at $2.50.

      • 1 Reply to bearle61
      • My apologies for the CGM question. I'm just getting caught up on some reading from the other end of my vacation. After reading the other thread topic, my immediate reaction was that GSL severe downward pricing is following new perceived risk coming out of CGM liquidity as evidenced from recent CGM bond pricing activity. Makes much more sense now, even if the issue is overblown. Edge's commentary, as usual, was spot on. I did hear a few rumblings on the quality of French sovereign debt yesterday. Perhaps there is a small correlation with the lack of GSL bounce back today (potential French debt problem leads to potential lack of CGM safety net from the French SFI leads to GSL uncertainty and downward price pressure).

    • also, if i am not mistaken, DAC is still prevented by terms of their restructure from paying dist's for a while yet.

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