Global Ship Lease still seeks ways to refinance 10% notes due 2019

By Devika Patel

Knoxville, Tenn., July 31 – Global Ship Lease, Inc. plans to continue looking for ways to refinance its 10% first-priority secured notes due 2019, but management refuses to consider any opportunity that does not meet its expectations as to pricing and terms.

“We continue to evaluate opportunities to proactively enhance our balance sheet through both deleveraging and opportunistic refinancing of our 10% notes,” chief executive officer Ian J. Webber said on the company’s second-quarter earnings conference call on Monday.

“Whilst these notes don’t fall due until April 2019, some 18 months away, we will continue to look for opportunistic refinancings, moving forward only as such time as we find terms to be sufficiently attractive and supportive of the Global Ship Lease strategy.

“This was exemplified by our recent approach to the bond market, which ultimately we suspended, as we were not able to price the transaction on terms acceptable to us.

“We were encouraged, however, by investor feedback and continue to evaluate ways forward.”

Webber said the company plans to continue paying down debt.

“Our long-term contracted cash flows put us in a position where we can actively pursue enhancements to our balance sheet,” he said.

“Having reduced our net debt to adjusted EBITDA ratio from 3.3x as of March 31, 2017 to 3.1x at this most recent quarter end, June 30, we’ll continue with these efforts whilst also continuing to look for attractive opportunities to proactively refinance our outstanding 10% notes.

“At the same time, it’s important to keep in mind that we have no material refinancing obligations until April 2019 and we are thus able to approach any opportunity in a measured and disciplined manner, proceeding only at such time as we believe that we can achieve terms that support our long-term strategic goals.”

The company purchased and canceled $19.5 million of its 10% first-priority secured notes due 2019 on April 21.

The company’s cash balance at the end of the quarter was $59.4 million.

Total debt was $396.9 million, down $23 million since the end of 2016. Net debt was $337.5 million.

Net debt to last 12 months adjusted EBITDA was 3.1x at June 30, down from 3.3x at Dec. 31, 2016.

Adjusted EBITDA was $28.1 million for the three months ended June 30, down from $28.8 million for the three months ended June 30, 2016. Adjusted EBITDA for the six months ended June 30 was $56.1 million, compared to $58.1 million for the comparative period in 2016.

On June 28, Global Ship Lease announced that it had launched a $400 million offering of five-year senior secured notes.

It had planned to use the proceeds from the Rule 144A and Regulation S sale to fully redeem the 10% notes and to repay and terminate its revolving credit facility, but on July 7, the company announced that it had chosen to suspend the planned offering.

Platou Securities was leading the effort to place the new notes.

Global Ship Lease is a containership charter owner based in London.

© 2015 Prospect News.
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