I like that guy. He cuts through the noise and gets right to the point. I do not agree with him, however. I think ASPS needs to get that debt paid down and the company's conservative use of cash flow is correct.
ASPS derives revenues from RESI and RESI currently has a board contest. The activist shareholders want RESI to diversify service providers - which would be bad news for ASPS.
Would you lend to a company with a significant presence in the containership market right now? Maybe, but you would want a 15% rate on it.
It looks to me like they triggered loan terms which required the reduction and cash reserve. I am not sure they had a choice.
It is, but it is small consolation for those (including me) owning shares.
Me either. Didn't see the lender issue coming. Someone stole shares in the low 2s this morning. I am hoping it drops like that on the open. I will load up. One good thing about this report is now there is fairly complete clarity for the next few years. It also sounds like they have modeled a worst case scenario - that HMM goes under and they have to give away charters on those boats.
Good analysis. I will have serious concerns about CPLP if product tanker/crude tanker rates dip dramatically, container counterparties start breaching agreements, or if container rates have not improved by the middle of 2018.
Who knows why it has imploded. Cash flow still covers the dividend and then some. I think the market is worried about the troubles with HMM and the softening crude tanker rates, but that does not explain this big of a drop.
I am betting the charter cut is no more than 20%. If the owners knew or suspected that the Korean government would bail out HMM, I bet they played hard ball.
I agree. It looks like CPLP may be taking a moderate haircut on these rates, in exchange for some equity. This certainty should help the share price, even if the distribution is cut a little bit.
1. They pay out almost all cash flow. Earnings is reduced by depreciation.
2. MLPs are out of favor, container rates are trash, one of CPLP's container counter parties (Hyundai Merchant Marine) is in serious trouble and has asked for 20-30% rate concessions. Also there has been some softening in crude tanker rates over the last few weeks (it has turned around some in the past few days)
3. I think so.
There are plenty of dead man walking shipping stocks that are a much better short than this.
There never was a press release. Not sure why the name calling. They filed on Friday and it is still there
What do you mean it was pulled? It was filed with the SEC and I do not see a corrective filing?
Keep posting. I want to read all takes on this move by management
I agree that there is a concrete purpose for this. The question is whether or not the common unit holders are going to get screwed or whether this is great news - like a significant buyback.
"The current dislocation of pricing in the wider MLP space means that their cost of capital has increased substantially with our common units yielding today close to 22%. So to answer your question Capital Maritime continue to trade the vessels; there is definitely no obligation from our part or we don't feel that there is an obligation from our part to drop down the vessels and definitely not at this valuation." This seems to indicate that CPLP has no intention of selling common stock to fund the 8 dropdowns at an even higher valuation.