Container ship and LNG carrier owner Capital Product Partners (CPLP) raised all the €100m ($102m) it was planning to tap in a successful second sale of bonds on the Athens Stock Exchange.
Greek institutional and retail investors lapped up the issue of unsecured seven-year paper, oversubscribing it by a factor of 3.6 times, the company said late on Friday.
CPLP’s chief executive officer Jerry Kalogiratos described this as an “exceptionally high demand” and expressed his company’s “warm thanks” to Greece’s investment public for supporting its plans.
CPLP intends to use the funds mainly to repay debt or to help fund the company's LNG carrier newbuilding program.
The new bond “provides us with financial flexibility in view of our vessel acquisition program in a rising interest rates environment,” Kalogiratos said.
On a fully-delivered basis, which includes vessels under construction, CPLP expects to have a fleet of 15 container ships, seven last-generation LNG carriers and one bulker by May 2023.
Higher coupon
Given tightening monetary policy around the world, CPLP had to offer investors a significantly higher premium compared to the company's initial sale of €150m worth of unsecured five-year bonds in October 2021.
The seven-year paper priced on Friday carries a coupon of 4.4% paid semi-annually — up from 2.65% in October.
According to Kalogiratos, the bond was a success as it was issued at the low end of the yield range.
Analysts tend to agree.
“The offer [which ran from 20 July to 22 July] was practically oversubscribed from day one as LNG investments and Marinakis’s name are viewed as a guarantee,” said Dimitris Roumeliotis, an analyst at Xclusiv — an Athens ship brokerage that also advises on financing deals.
“Many in Greece prefer to put their money in a bond in the Athens Stock Exchange — especially when the coupon is at 4.4% and interest rates on bank deposits remain near zero,” Roumeliotis added.
Benefitting from their superior reputation at home, Greek shipowners have been raising such capital at a cheaper cost than they would in Oslo or New York.
Another two US-listed shipping companies that broke open the Athens shipping bond market last year were Costamare and Safe Bulkers.
Even though the 4.4% coupon remains below the funding costs that a Greek shipping company would incur if it issued bonds outside its home country, it creates a new benchmark that may be raising the bar for a repeat shipping bond in Athens, Roumeliotis warned.
