Danaos buys back $37m 8.5% notes in private deal
PRESS RELEASE Danaos Corporation Announces Senior Notes Repurchase 12/01/2022 ATHENS, Greece–(BUSINESS WIRE)– Danaos Corporation (NYSE: DAC), one of ...
The charter market just keeps getting better and better for non-operating containership owners, with record daily hire rates turbo-charging the value of their assets.
Yesterday during a company update investor call, MPC Container Ships (MPCC) CEO Constantin Baack said 2022 had started “even stronger” for the charter market than it finished in December.
Mr Baack said there was strong evidence of long-term structural changes in the containership charter sector, which had moved from a ‘spot’ 6-12 month market to a ‘forward’ one, with extensions and new fixtures being done on average 300 days ahead of the charter party.
He argues that the traditional charter market indices are “misleading”, given that they are historically based on a 12-month charter period, whereas the market has moved to two- or three-year, or longer-term, charters.
Mr Baack provided details of the last seven fixtures concluded by MPCC with charterers, which were all for periods of three years. Moreover, the fixture this month of the 2007-built 3,586 teu AS Nadia, which will commence its three-year charter in July, will earn the shipowner $61,000 a day, an eye-watering total of $67m.
According to Vesselsvalue data, the ship has a current market value of $45m, and was acquired by MPCC in December 2020 for just $10m.
The shipowner sold six vessels last year, crystallising huge profits for its shareholders, but with the charter market red hot and showing no sign of cooling, it is unlikely to be tempted to part with any more from its 67-ship fleet – although Mr Baack conceded that MPCC would listen to offers for ships if they compared favourably against the charter hire backlog.
Indeed, ocean carriers that have not been proactive in the charter or S&P markets in the past year are in a bind, and face losing market share to their more aggressive competitors due to their inability to adequately cover their network commitments.
It follows that some carriers are now so desperate for tonnage that they are prepared to override previous limits for sectors and outbid rivals for any tonnage that comes on the charter or S&P radar, regardless of the length of current charters.
MSC, for example, has hoovered-up more than 130 second-hand ships since August 2020, and has taken ownership of several vessels where the remaining charter hire extends to six months or more.
Elsewhere, Greek non-operating containership owner Danaos reported this week it had agreed the sale of two 20-year-old 6,422 teu sister vessels for a total of $130m, almost double the fee it paid for them as part of the consolidation of Gemini Holdings just six months ago.
And as further evidence of the seemingly sustainable strength of the containership market, Danaos said the ships would not be delivered to the buyer until November, after the current charters expired.
Meanwhile, stakeholders in the NOOs are in for a dividend bonanza on the back of the huge earnings with, for instance, MPCC pledging to return 75% of its quarterly net profits to its shareholders.