Jefferies has upgraded shares of Flex LNG after $430m in refinancing deals bolstered its balance sheet’s ability to continue paying shareholders.

But the US investment bank is not yet ready to put a “buy” tag on the New York and Oslo-listed LNG shipowner.

Flex LNG ties up two new facilities on three vessels to refinance $375m loan
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Jefferies analyst Omar Nokta lifted his rating from “underperform” to “hold” after the company announced the deals.

“Its backlog remains intact and its pro forma balance sheet provides support to its dividend,” he wrote of the John Fredriksen-backed company.

TradeWinds reported earlier on Wednesday that Flex locked in a sale-and-leaseback deal for $160m for the 173,000-cbm LNG carrier Flex Endeavour (built 2018), with the financing maturing in 2034.

And it secured a new $270m bank loan for its 174,000-cbm Flex Aurora (built 2020) and Flex Ranger (built 2018) that will mature in 2030.

The moves allowed the company, led by chief executive Oystein Kalleklev, to refinance a $375m bank facility and unlock $93m in cash.

The loan deals were revealed on the same day that Flex reported better-than-expected adjusted earnings per share of $0.56, above the average analyst forecast of $0.50.

Nokta said the company’s active debt management probably keeps its dividend safe.

“Despite ongoing quarterly free cash of $0.45 per share, we believe the risk to a dividend cut has decreased with its latest debt arrangements boosting its pro forma cash position to $467m,” he wrote.

He kept his 12-month price target at $24 per share, which is lower than the company’s share price of $25.87 at the close of trading on Wednesday.

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