French container line CMA CGM is poised to address its debt maturity concerns with a big new bond issue.
The company said in a statement it had launched an offering of senior notes worth €525m ($616m) and which will fall due in 2026.
Proceeds from the sale, together with available cash on hand, will be used to redeem all of its outstanding €525m in 7.75% bonds due in January next year .
CMA CGM will pay 100% of the principal, plus accrued interest.
BNP Paribas and HSBC Holdings are global coordinators for the offering.
The company began holding virtual roadshows on Tuesday, with pricing expected toward the end of the week.
Earlier plan shredded by Covid-19
CMA CGM had discussed a refinancing earlier this year, but this plan was scrapped after the coronavirus pandemic hit world markets.
Consultancy Alphaliner said: "CMA CGM has ironically benefited from Covid-19 related delays, with freight rates now higher — and fuel prices lower — than when the company first looked at refinancing the debt at the start of the year."
"CMA CGM is also in a stronger financial position," Alphaliner added.
The company's bonds slumped in the spring, but recovered strongly in May, when it secured a €1.05bn loan that was 70% backed by the French state.
CMA CGM had an adjusted net debt of about $17.1bn as of 30 June, according to its second quarter earnings report.
Year-high for bonds
Net profit was $136m for the second quarter, compared to a loss of $109m a year earlier.
The 2021 bonds are currently trading at a 52-week high, after hitting an annual low of €70.76 in March.
Ratings agency Moody’s changed the outlook for the company to positive on Monday, after liquidity rose by $1bn since the end of last year.
But the French line faces another big maturity when its €650m in 6.5% bonds mature in 2022.
Shipowners have been taking advantage of more favourable bond markets in recent months, particularly in Oslo.
