Norwegian shipowner Klaveness Combination Carriers (KCC) is heading out on the road to raise bond cash.

The company said it has asked Danske Bank, Nordea, Pareto Securities and SEB to arrange a series of fixed-income investor meetings starting on Friday.

Subject to market conditions, it could sell a five-year unsecured bond denominated in Norwegian kroner or US dollars.

In conjunction with this, KCC is considering a buyback of its NOK 300m ($33.34m) KCC03 issue.

This matures in May 2021 and carries interest of three-month Nibor plus 5.25%.

The rest of the money will be used for general corporate purposes.

CEO Engbret Dahm told TradeWinds the exact amount to be raised has not yet been decided, but KCC is targeting an "upsizing" from the current NOK 300m issue.

"We target to improve the margin compared to the current issue of 5.25%," he added.

Rates picked up in second half

KCC also released preliminary average earnings for its vessels in 2019.

The nine CABU ships, which carry bulk cargoes and caustic soda solutions, ended with an average of $16,877 per day.

The three newbuilding CLEANBU vessels, which also carry bulk but can handle oil products as well, managed $18,300.

CABU earnings in 2018 were higher at $17,492 per day.

Dahm told TradeWinds there were some headwinds in the first half due to a weak dry bulk market and lower caustic soda shipment volumes.

This was because the Brazilian government forced a 50% production cut at Norsk Hydro’s Alunorte, one of KCC’s main customers.

"Alunorte has ramped up production during the second half of 2019 and both caustic soda solution shipment volumes and CABU earnings improved substantially in the second half, but not enough to fully offset the weaker first half 2019 earnings," he said.

In November, KCC said CLEANBU earnings ended the third quarter at $22,802 per day, 1.7 times the market earnings of standard LR1 tankers, while the CABU figure was $17,287 per day, 1.7 times that of regular MR tankers.

"2020 CABU contract discussions are progressing well, supported by a stronger tanker spot market and positive tanker market outlook for 2020," KCC added at the time.

Net profit in the third quarter was $1.54m, up from $1.31m in 2018.

Revenue reached $16.57m versus $13.39m a year ago.