Ocean Yield has determined the size of its newcastlemax transaction with CMB.Tech.
The number of the bulkers with long-term charters to the Belgian shipowner has been finally set at eight, the Norwegian leasing specialist said in its third-quarter report.
At the end of 2022, Ocean Yield decided to invest in up to 10 of the 210,000-dwt newcastlemax newbuildings, with 15-year bareboat charters to CMB.Tech.
In May last year, Ocean Yield said the companies had agreed that the “final transaction scope” would be eight or nine vessels.
Alexander Jost, head of research at Arctic Securities, said in a note: “No new investments were announced in the third quarter of 2024, with the biggest news from the portfolio side being that the CMB.Tech deal was scaled down to encompass eight vessels.”
After the end of the third quarter, Ocean Yield took delivery of the Mineral Eire (built 2024), which began a 15-year bareboat charter to CMB.Tech.
In yesterday’s report, the leasing player also disclosed the sale of the 40,100-dwt bulkers Interlink Fortuity and Interlink Celerity (both built 2017) and the 3,836-teu container ships Detroit Express, Livorno Express, Genoa Express and Barcelona Express (all built 2014) through purchase options.
“We see these vessel sales as neutral in nature for [Ocean Yield],” Jost added.
Ocean Yield’s adjusted Ebitda rose to $94.6m in the third quarter from $79m a year earlier. Revenue increased to $61m, up from $54.5m.
Arctic said the results were “largely in line with expectations”.
Ocean Yield declared a dividend of $60m for the third quarter.
Arctic believes the payout will be the only one for the year, similar to 2023. when Ocean Yield declared one dividend in the third quarter.
“Assuming the $60m represents a payout for 2024 as a whole, this would equate to a 68% payout ratio against our 2024e net profit estimate, well below our estimated 90% payout ratio,” Jost said.
According to Arctic, the quarter was “credit neutral” and the bank sees bonds to be traded “in line with the market”.
Ocean Yield’s senior credit curve is among the tightest trading bonds in the high-yield shipping space.
“This is fair given the strong earnings visibility and diversification, in our view. We continue to find the perpetual attractive at 8.6% yield, although the bonds offer a lower than usual pickup (100bps) against the senior bond curve,” Jost added.
Arctic acted as manager in connection with Ocean Yield’s NOK 1.25bn ($110m) senior unsecured bond issue earlier this year.
