Pretty vanilla call (which is why we own this thing, right?) No surprises.
- panamax day rates have risen to $10k/daily from $8k as of last call
- Ian stated we would need an additional waiver if ship prices stayed where they are come November
- DRZ analyst pointed out that cash flow paydown should get us below 75% LTV alone. Ian did not confirm or deny. DRZ analyst asked what level board was seeking for comfort (60%?). Again, nothing specific from Ian
Noticed that bid/ask of stock shifted down when Ian mentioned raising capital to pay down debt (this was a completely theoretical response to DRZ's question on LTV). I think for those who have listened to past calls and have spoken with the company, there is no intention of raising equity capital at these levels. So, any market reaction to this comment, is unwarranted, in my opinion.
the real question is: how much will the dividend be on an annualized basis at Yr End 2013? Will they max out the divy post $40m forced amortization? If they had any brains and understanding of US financial markets, they would.
they could do 60 cents (15 cents a qtr) conservatively i would think. With SSW yielding .19*4 = .76/17.0 = 4.5% and cmre yielding .27*4 = 1.08/14 = 7.7% you could see gsl around $6.00 (10%) to $8.00 (7.5%) when the divy is resumed.
Edge - Ian did deny this: "cash flow paydown should get us below 75% LTV alone. Ian did not confirm or deny". He said that ship values need to improve to get us to 75% by Nov. The math is pretty straight forward and I agree with Ian. I don't think it matters much either way. In compliance or not, I doubt the board would initiate a divy until mid to late 2013.