Hoegh LNG has revealed another major equity injection from the controlling Hoegh family and Morgan Stanley to avoid a more expensive bond buyback.
The FSRU and LNG carrier owner’s annual report shows the company raised another $19.8m from the shareholding partnership between the family and the US investment bank on 21 April, following injections totalling $48m in 2021.
Fearnley Securities said the deal showed “continued shareholder support”.
Last month, Hoegh LNG avoided a requirement to buy back two bond issues at 102% of par by pledging shares in US-listed spin-off Hoegh LNG as security for bondholders.
This is a temporary measure ahead of planned $100m equity injections by the end of 2022 to stave off the more expensive bond repurchase while it considers “growth initiatives”.
Fearnleys interpreted this as meaning the company’s offer to take over Hoegh LNG Partners.
The floating storage and regasification unit spin-off company is evaluating the merger offer from its parent.
On 6 December, the partnership received an unsolicited non-binding offer from Hoegh LNG to acquire all its shares for $4.25 each.
But Fearnleys is not ruling out other routes for growth, including outright FSRU acquisitions.
Two bond issues worth NOK 2.47bn ($277.5m) were amended last year as part of the sale of Hoegh LNG to Morgan Stanley Infrastructure Partners in a $214m deal.
Fearnleys said the bonds have traded up from high 80s/low 90s to levels around par, but continue to offer attractive risk/reward as spreads remain close to 6%.
The investment bank said: “We see further spread compression potential for the bonds with multiple triggers ahead, including new contracts and a potential merger with Hoegh Partners which we consider credit-accretive for Hoegh LNG.”
