Denmark's Norden is eyeing dry cargo opportunities through its first ever bond issue.
A sale is being explored to raise $100m, two weeks after the company revealed it expects a big jump in profit this year.
The bulker and tanker owner-operator said it has brought in investment banks Pareto Securities and SEB as joint lead managers and bookrunners.
They will arrange a series of fixed-income investor calls from 16 June to drum up interest.
Norden expects to sell $100m initially, but the maximum issue amount has been set at $150m. The unsecured bonds will mature over three years.
The company's investor communications partner Thomas France told TradeWinds: "It is the first bond we do here in Norden, and it is simply a manner of exploring ways of diversifying our long-term funding as an asset-light company."
He added that, in the current investment climate, Norden sees bonds as an attractive option.
"Any potential proceeds will be used to support Norden's business growth, including acting on attractive business opportunities mainly within the dry cargo market," France said.
Much more profit due
At the start of June, the company hiked its adjusted profit forecast for 2021 to between $110m and $160m.
This is up from its previous estimate in the range of $75m to $125m.
The rise is due to a strong performance in the dry division and based on "unrealised future earnings" in a market with unusually high volatility, the shipowner said.
Norden had fallen to a loss in the first quarter as the group suffered a blow from the weak product tanker market.
The results were also weighed down by a negative result for its bulker operating division, after strong dry cargo freight rates caught the company by surprise.
Norden posted an adjusted loss of $6m, compared to $29m in profit a year ago.
Dry tactics changed
Revenue during the period was $603.9m, only 2% lower than during the first quarter of last year, but Norden was hit with higher levels of depreciation and a $9.2m loss from selling vessels.
The dry arm logged a loss of $200,000 during the period, despite being highly profitable during the second half of 2020.
The shipowner said it had anticipated a weak start to the year based on normal seasonality and entered 2021 with short positions and a small number of open vessels relative to available cargoes.
But Norden quickly switched things up and built a "significant" long position during the period, which will benefit its earnings from the second quarter onwards.
