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Raising Equity in Shipping Today
June 4, 2009
Table of Contents
Raising Equity in Shipping Today
1. Raising Equity in Shipping Today 1
2. Legal Considerations 11
3. Key Takeaways 15
4. Bank of America Merrill Lynch Credentials 16
Raising Equity in Shipping Today
05/30/08 07/21/08 09/11/08 11/03/08 12/25/08 02/16/09 04/09/09 06/01/09(140.0)%
(120.0)%
(100.0)%
(80.0)%
(60.0)%
(40.0)%
(20.0)%
0.0)%
20.0%
Traditional Tankers Yield Tankers Drybulk Container Leasing Container Shipping Marine MLPs BDI
1
Stock Price Performance Across Shipping Sectors
Last Twelve Months Indexed Stock Price Performance
Raising Equity in Shipping Today
____________________Source: FactSet as of June 1, 2009.(1) Includes Frontline, OSG, Teekay Corporation, Top Ships, TORM and Tsakos Energy Navigation. (2) Includes DHT Maritime, General Maritime, Knightsbridge, Nordic American Tankers, Omega Navigation, Ship Finance and Teekay Tankers. (3) Includes DryShips, Excel Maritime, Navios Maritime, Diana Shipping, Eagle Bulk Shipping, Genco Shipping & Trading, Safe Bulkers and TBS International. (4) Includes Danaos, Seaspan and Global Ship Lease.(5) Includes AP Moller Maersk, CSCL, Evergreen Marine, Hanjin Shipping, Hyundai Merchant Marine, Neptune Orient Lines, Nippon Yusen, Orient Overseas, Regional Container Lines and Wan Hai.(6) Includes Capital Product Partners, K-Sea Transportation Partners, Navios Maritime Partners, OSG America, Teekay LNG Partners and Teekay Offshore Partners.
(1)
Shipping Sector
LTM Performance
3-Month Performance
Marine MLPs (39.9%) 14.3% Yield Tankers (44.4%) 26.7% Container Shipping (46.3%) 24.5% Traditional Tankers (61.1%) 20.8% BDI (72.0%) 82.8% Container Leasing (77.1%) (15.1%) Drybulk (82.3%) 38.2%
(2) (3) (4) (5) (6)
Over the last year, shipping stocks performance was affected by the global financial and economic crisis
06/02/08 07/01/08 08/01/08 09/01/08 10/01/08 11/03/08 12/01/08 01/01/09 02/02/09 03/02/09 04/01/09 05/01/09 06/01/092.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
Traditional Tankers Yield Tankers Drybulk Marine MLPs(1) (2) (3) (4)
2
LTM Valuation Across Shipping Sectors
Last Twelve Months EV / EBITDA
Last Twelve Months P / E
Raising Equity in Shipping Today
____________________Source: FactSet as of June 1, 2009.Note: Container Shipping and Container Leasing excluded due to lack of consistent data.(1) Includes Frontline, OSG, Teekay Corporation, Top Ships, TORM and Tsakos Energy Navigation. (2) Includes DHT Maritime, General Maritime, Knightsbridge, Nordic American Tankers, Omega Navigation, Ship Finance and Teekay Tankers. (3) Includes DryShips, Excel Maritime, Navios Maritime, Diana Shipping, Eagle Bulk Shipping, Genco Shipping & Trading, Safe Bulkers and TBS International. (4) Includes Capital Product Partners, K-Sea Transportation Partners, Navios Maritime Partners, OSG America, Teekay LNG Partners and Teekay Offshore Partners.
05/30/08 07/21/08 09/11/08 11/03/08 12/25/08 02/16/09 04/09/09 06/01/090.0x
5.0x
10.0x
15.0x
20.0x
25.0x
Traditional Tankers Yield Tankers Drybulk Marine MLPs(1) (2) (3) (4)
Valuation across shipping sectors have been impacted by the global financial and economic crisis
3
Raising Equity in Shipping TodayHistorical Trends in Shipping Equity Offerings
(150%)
(100%)
(50%)
0%
50%
100%
150%
200%
250%
12/29/2006 4/6/2007 7/13/2007 10/20/2007 1/26/2008 5/3/2008 8/10/2008 11/16/2008 2/22/2009 6/1/2009
1/9/07
1/15/07
1/23/07
1/23/07
2/13/07
2/28/07
2/28/07
3/12/07
3/29/07
3/29/07
4/17/07
4/19/07
4/24/07
5/18/07
5/23/07
6/6/07
6/29/07
7/18/07
7/23/07
8/10/07
8/14/07
9/18/07
9/21/07
9/21/07
9/24/07
9/26/07
10/24/07
11/7/07
11/8/07
11/12/07
12/5/07
12/10/07
12/12/07
4/10/08
4/17/08
4/29/08
5/13/08
5/21/08
5/22/08
5/29/08
6/12/08
6/17/08
6/25/08
8/20/08
12/8/08
1/9/09
1/28/09
3/2/09
3/25/09
5/8/09
5/8/09
5/12/09
Eagle Bulk Shipping Inc
Add-On IPO ATM
Double Hull Tankers Inc
Genco Shipping & Trading Ltd
Oceanaut United
Capital Product Partners L.P.
Seaspan Corp
Navios Maritime Holdings
Bergesen Worldwide Gas ASA
Diana Shipping Inc
Eagle Bulk Shipping Inc
Far Eastern Shipping Co OAO - FESCO
Diana Shipping Inc
Ultrapetrol (Bahamas) Ltd
OceanFreight
Teekay LNG Partners LP
Double Hull Tankers
Euroseas
StealthGas
K-Sea United
Seanergy Maritime
Genco Shipping & Trading
Nordic American Tanker Shipping Ltd.
Paragon Shipping
Seaspan
Eagle Bulk Shipping
Diana Shipping FreeSeas
Euroseas
OSG America LP
Navios Maritime Partners LP
Top Tankers Inc.
Mercator Lines (Singapore) Ltd
Teekay Tankers Ltd
Genco Shipping & Trading Ltd
Safe Bulkers
Teekay Offshore Partners LP
Britannia Bulk
K-Sea
Navios Maritime Acquisition
TBS International Limited
Nordic American Tanker Shipping Ltd
Double Hull Tankers Inc
Teekay LNG Partners LP
Seaspan
Ship Finance International
Nordic American Tanker Shipping Ltd.
DryShips Inc
Eagle Bulk Shipping Inc.
Diana Shipping, Inc.
DryShips Inc
Nordic American Tanker Shipping Ltd.
Teekay LNG Partners LP
____________________Source: Factset as of June 1, 2009.Index includes: Danaos (DAC), Seaspan (SSW), Capital Product Partners (CPLP), K-Sea Transportation (KSP), Navios Maritime (NMM), OSG America (OSP), Teekay LNG (TGP), Teekay Offshore (TOO),
DHT Maritime (DHT), Frontline (FRO), General Maritime (GMR), Knightsbridge (VLCCF), Nordic American (NAT), Omega Navigation (ONAV), Ship Finance (SFL), Teekay Tankers (TNK), Overseas Shipping Group (OSG), Teekay Corp (TK), Tsakos (TNP), Diana Shipping (DSX), Eagle Bulk (EGLE), Euroseas (ESEA), Genco (GNK), Oceanfreight (OCNF), Paragon Shipping (PRGN), Safe Bulkers (SB), DryShips (DRYS), Excel Maritime (EXM), Navios Maritime (NM) and TBS International (TBSI).
Add-On IPO ATM2007 Total 23 10 02008 Total 8 3 12009 Total 7 0 2
Under the current market environment, equity capital raising has trended towards ATM Equity offerings
4
Equity Raising Execution Alternatives
Fully Marketed
Rapidly Marketed
Block Trade
At-the-Market (ATM) Equity
Marketing effort Broadest, 3 – 4 day U.S. roadshow plus net roadshow &
conference calls
Focused, conference calls and selected one-on-ones
Limited, potentially one conference call for accounts
None
Investor pool Broadest institutional & retail Targeted institutional & retail Focused institutional Market participants
Management time commitment 3 – 4 days 1 day Minimal None
Price certainty None Limited High, no market risk None, market dependent
Ability to include co-managers Yes Yes No No
Benefits Most efficient method of communicating corporate strategy & understanding investor concerns
Best opportunity to build book of institutional demand, pricing tension & further diversify shareholder base
Ability to include retail
Potential for stock price to trade up through marketing
Ability to upsize deal
Limited market exposure
Limited time commitment for management
Ability to upsize deal
Modest ability to attract new holders and include retail
Highest degree of price certainty & proceeds
Limited time commitment for management
Issuer controls timing & nature of sales
Sales are made at prevailing market prices, with no file / offer discount
Issuer is price setter, not price taker
Issuer maybe able to benefit from a rising stock price
Sales are made on a discreet basis – actual sales only disclosed at quarter end
Considerations Management time commitment
Market exposure during marketing
Gross spread
Minimal time to build book of demand & create price tension
Market/price risk if not an overnight offering
Gross spread
Deep discount to last sale may be required
Technicals limit deal size
Placement of shares typically limited to existing holders
Limited ability to place retail
Greater likelihood of aftermarket selling pressure
Market exposure during term of sales
Proceeds are subject to market liquidity
No forum through which to provide investors an update on the latest Company “Story”
Raising Equity in Shipping Today
5
Raising Equity in Shipping TodayToday’s ATM Equity Application
2007 – 2009YTD Market LiquidityDJ US Financials Weekly Volume (in mm shares)
Marketed Add-On Offering Pricing Impact Average Change from File to Offer (1)
2007 – 2009YTD Market Volatility
With the backdrop of increased market volatility, traditional methods of equity capital raising have experienced meaningful file to offer discounts
Issuers can use the ATM Equity program to:
Use the increased liquidity environment as an asset by tapping into the regular trading flow
Mitigate the volatility in the stock by selling equity during periods of stock price strength, and slowing / halting sales during periods of stock price weakness
Reduce or eliminate the file to offer discount on sales activity
____________________(1) SEC Registered transactions excluding block trades, ADRs, rights offering, close end funds, and deals less than $50mm.
56%67%78%
89%100%111%122%133%
Jan07
Mar07
May07
Jul 07
Sep07
Nov07
Jan08
Mar08
May08
Jul 08
Sep08
Nov08
Jan09
Mar09
May09
Market Return
5
15
25
35
45
55
65
75
VIX Level
DJIA S&P 500 NASDAQ VIX
Jan 07
Mar 07
May 07
Jul 07
Sep 07
Nov 07
Jan 08
Mar 08
May 08
Jul 08
Sep 08
Nov 08
Jan 09
Mar 09
May 09
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
(13.2)
(3.6)
(9.0)
(6.5)
(24.0)
(7.3)
(2.0)
(6.3) (5.7)
(19.5)
(10.2)
(17.2)
(9.6)(10.2)(12.7)
(14.1)(12.8)
(2.1)
(16.4)
(11.8)
(7.6)
(11.4)(12.2)
(1.9)
(8.2)
(15.0)
(25)
(20)
(15)
(10)
(5)
0
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Non Financials Avg (9.5%) Financials Avg (10.4%)
6
Historical TradingCompany (“XYZ”) 2008 – 2009YTD Price and Volume
ATM Equity is registered sale of primary equity structured to take advantage of increased market volatility and trading volumes by tapping into existing secondary market liquidity over time
Increased trading volume and volatility create opportunities to move large amounts of stock without creating an overhang
Volume: A few days volume expected to be sold “from time to time” should have very little discernable trading impactVolatility: Big stock price moves tend to happen on large volume daysShort Covering: Many stocks move down on low volume but bounce up on high volume as shorts are covered
Traditional equity offerings do not allow companies to sell into this technical volume
The ATM Equity program is an attractive method of raising equity capital in this environment
Application in Today’s Market
____________________Note: Market data as of 5/8/2009, assumes XYZ stock price of $8.49, 3-month ADTV of 47.40 mm shares
Size of Shares % of Program Size Relative to % of 3m ADTV:
Program Sold Outstanding 15% 20% 25%
$200 mm 23.6 mm 4.1% 3 days 2 days 2 days
$300 mm 35.3 mm 6.1% 5 days 4 days 3 days
$400 mm 47.1 mm 8.2% 7 days 5 days 4 days
$500 mm 58.9 mm 10.2% 8 days 6 days 5 days
$600 mm 70.7 mm 12.2% 10 days 7 days 6 days
1 Month 3 Months
Reference Price $8.49 Daily Share Volume (mm) 53.05 47.40
52-Week High $21.94 Average Price $4.28 $2.83
52-Week Low $1.01 Volume / Day $227.1 mm $134.1 mm
Shares Outstanding (mm) 576.9
Market Capitalization ($mm) 4,898.2
Short Interest 9.8%$0
$6
$12
$18
$24
$30
Jan08
Feb08
Mar08
Apr 08
May08
Jun08
Jul 08
Aug08
Sep08
Oct 08
Nov08
Dec08
Jan09
Feb09
Mar09
Apr 09
May09
Volume(mm shares)
0
20
40
60
80
100
Price Volume Price 3m ADTV
ATM Equity Trading ConsiderationsRaising Equity in Shipping Today
Legal Considerations
7
Accounting & Tax Considerations
Step 1: As either an exhibit to a post-effective amendment or a 6-k or a 8-K filing, an Equity Distribution Agreement is filed outlining the arrangement between Merrill Lynch and Company
Step 2: Company then files a prospectus supplement prior to execution
Step 3: Company places sell orders directly with Merrill Lynch when funds are needed. The Company may provide specific instructions for the sales (limit orders, etc.)
Step 4: At quarter end, Company discloses cumulative sales in both a prospectus supplement and their 10-Q/K
Merrill Lynch conducts due diligence consistent with traditional equity distributions
Comfort letter and legal opinions provided at launch and at least quarterly as long as program is in place
Bring down diligence is conducted quarterly while the transaction is ongoing
Share count is adjusted at the time shares are settled with investors
ATM Equity is a transaction in a Company’s own stock and therefore tax-free per Section 1032 of the IRS Code
Registration & Execution Process
ATM Equity MechanicsRaising Equity in Shipping Today
8
ATM Equity Precedent Transactions
Recent ATM Equity Transactions
Raising Equity in Shipping Today
Deals by Industry
____________________Source: SEC Filings. Data as of 6/1/2009(1) Each stock is compared to a respective industry index that the stock belongs to.
Count of
TransactionsTotal Transaction
Size ($mm)
Average % of Shares
Outstanding
Financials 23 $23,089 10.6%
REITS 79 $8,725 9.5%
Energy & Power 35 $4,401 6.3%
Transportation 20 $4,249 24.6%
Industrials 8 $2,541 7.5%
Media & Telecom 3 $238 3.9%
Healthcare 10 $170 14.0%
Technology 4 $82 5.2%
182 $43,494 10.6%
$23.1
$8.7
$4.4
$0.2
$0.1
$0.2
$2.5
$4.2
8
35
20
$bn
- 1.0 2.0 3.0 4.0 5.0 6.0 7.0
//
Relative Price Return to S&P 500 Relative Price Return to Indices (1)
Company Date FiledMarket Cap
($mm)Amount
Filed ($mm)% Shares
OutstandingMultiple of ADTV Industry 1 day 5 days 30 days 1 day 5 days 30 days
Zions Bancorporation 06/01/2009 $1,577 $250 15.85% 2.9x Financials - - - - - -NorthStar Realty Finance Corp. 05/29/2009 $222 $33 14.97% 13.5x REITS - - - - - -Mid-America Apartment Commun 05/29/2009 $1,024 $32 3.11% 0.9x REITS - - - - - -Ener1, Inc. 05/26/2009 $723 $40 5.53% 18.5x Technology 1.0% - - 0.2% - -Colonial Properties Trust 05/22/2009 $380 $50 13.14% 5.1x REITS 1.6% - - (2.3%) - -Liberty Property Trust 05/22/2009 $2,469 $150 6.07% 2.1x REITS (2.9%) (3.7%) - (0.8%) (5.2%) -Huntington Bancshares Inc. 05/20/2009 $1,938 $350 18.06% 2.8x Financials (9.1%) (16.8%) - (6.3%) (13.6%) -Fifth Third Bancorp 05/20/2009 $4,448 $750 16.86% 1.9x Financials (8.2%) (13.0%) - (5.4%) (9.8%) -EastGroup Properties, Inc. 05/19/2009 $864 $55 6.35% 4.3x REITS (2.0%) 0.5% - 0.1% (0.5%) -Marshall & Ilsley Corp 05/19/2009 $2,352 $350 14.88% 5.7x Financials (16.2%) (26.4%) - (13.1%) (17.9%) -SunTrust Banks, Inc. 05/15/2009 $5,363 $1,250 23.31% 4.4x Financials 1.3% (2.5%) - 3.1% 3.9% -BRE Properties, Inc. 05/14/2009 $1,144 $125 10.92% 2.6x REITS 4.1% 3.0% - 1.2% 0.2% -PNC Financial Services Group 05/14/2009 $3,475 $633 18.22% 1.1x Financials 1.1% (2.5%) - (1.1%) (0.9%) -KeyCorp 05/11/2009 $3,475 $750 21.58% 6.3x Financials (7.7%) (11.8%) - (1.4%) 3.2% -Ship Finance International 05/08/2009 $855 $82 9.62% 9.4x Transportation (2.2%) (10.2%) - (2.4%) (8.0%) -Southern Company 05/08/2009 $22,503 $575 2.56% 3.7x Energy & Power 3.0% 2.8% - 0.9% 3.0% -E*TRADE Financial Corporation 05/08/2009 $967 $150 15.51% 4.6x Financials 14.2% (8.5%) - 12.1% (8.7%) -
$3,691
$1,333
$861
$845
$825
$500
$18,928
2
9
4
6
5
7
10ML / BAS
Morgan Stanley
JP Morgan
UBS
Goldman Sachs
Cantor Fitzgerald
Credit Suisse
Raising Equity in Shipping TodayMerrill Lynch Leadership in ATM Equity
9
2009YTD Transactions (1)
Notional in $mm / Number of TransactionsDeal Highlights
Why Bank of America Merrill Lynch?
1) Structuring & Execution Market Leader17 ATM Equity transactions 2008 – 2009YTD
2) Leading Trader of U.S Listed Equities#1 in trading NYSE listed stocks in 2008
3) Dedicated ATM Equity Team22 professionals within Equity Financial Products team dedicated to ATM Equity
____________________(1) Source: SEC Filings and Bank of America Merrill Lynch internal database as of 6/1/2009.
ATM Equity OfferingUp to 19.2mm Share Transaction
Sales Agent
19,188,005 sharesCommon Stock
October 2008
ATM Equity Offering$250mm Notional Transaction
Sales Agent
$250,000,000Common Stock
September 2008
ATM Equity Offering$300mm Notional Transaction
Sales Agent
$300,000,000 Common Stock
August 2008
ATM Equity Offering$475mm Notional Transaction
Sales Agent
$475,000,000Common Stock
May 2009
ATM Equity Offering$275mm Notional Transaction
Sales Agent
$275,000,000Common Stock
April 2009
ATM Equity Offering$200mm Notional Transaction
Sales Agent
$200,000,000Common Stock
May 2009
ATM Equity OfferingUp to 1.25bn Share Transaction
Sales Agent
1,250,000,000 sharesCommon Stock
May 2009
ATM Equity Offering$750mm Notional Transaction
Sales Agent
$750,000,000Common Stock
May 2009
/
ATM Equity Offering$500mm Notional Transaction
Sales Agent
$500,000,000Common Stock
January 2009
BAC Stock Performance (Last 2 Months) Market Response
Transaction Background & DescriptionOn May 7, 2009, the government released stress test results suggesting that Bank of America (NYSE: BAC) needed to bolster tangible common capital by $33.9 billon
The additional capital would help BAC maintain a Tier 1 common ratio above 4% until the end of 2010After evaluating all of its equity and equity linked alternatives, and given market volatility and extraordinary market liquidity, Bank of America selected the ATM Equity program.
A target of $17 billion equity will be generated from a combination of an ATM Equity program and the exchange of public preferred and convertible preferred stock into common stockThe Bank of America ATM Equity program is the largest ATM Equity transaction ever filed (1)
Part B of the plan will include asset/business sales, expected to generate Tier 1 common of about $10 billion, such as China Construction Bank, First Republic, Columbia Management and joint venture arrangementsOther improvements to pre-tax pre-provision earnings expected during 2Q and 3Q, and various other items totaling roughly $7 billion
“Consistent with the media leaks, the government has asked BAC to raise/convert $33.9 billion to common equity. While the amount to be raised and the estimated losses were higher than we expected, BAC's plan to raise the capital is less dilutive than we had expected, making us feel better about the shares.”
-- Jefferson Harralson, Keefe, Bruyette & WoodsMay 8, 2009
“In addition to providing an efficient means of raising capital over time, an ATM issuance program gives management the flexibility to size the offering over time based on the success of asset sales, the amount of preferred that is exchanged into common, and BAC's profitability over the next 6 months. Additionally, details of the now looming preferred exchange offer seem to be a work in progress.”
-- Jeff Harte, Sandler O’Neill + Partners, L.P.May 8, 2009
____________________(1) Based on SEC Filings and Merrill Lynch internal database as of 5/8/2009
(1)
Bank of America Commits to Bolster Tier 1 Common by $33.9BNRaising Equity in Shipping Today
10
5/8/2009 (pre-open)ATM Equity program announcement for 1.25bn shares of common stock
16%
30%
44%
58%
72%
86%
100%
114%Return
$2
$4
$6
$8
$10
$12
$14
3/8/09 3/23/09 4/7/09 4/22/09 5/7/09
BAC Price
BAC EQUITY S&P 500 FINANCIALS INDEX S&P 500 INDEX
On the day after announcing the capital raise/ATM equity program, BAC stock price rose 4.89%
May 8, 2009
Up to 1,250,000,000 Shares
ATM Equity Offering
Common Stock
Sales Agent
Legal Considerations
11
Legal ConsiderationsATM Equity Offerings Overview
ATM programs are like any other offerings under the U.S. securities laws
An effective Registration Statement and a prospectus are required
The issuer, its directors, its senior executives (CEO and CAO), its accountants and the investment bank all have the same potential securities law liabilities that they would have in a conventional, fixed price underwritten offering
As a result, in an ATM program, the issuing company and the investment bank should begin by making the same preparation as they would in a conventional offering:
Due diligence examination of the Company with its management, accountants and legal counsel;
Accountants’ comfort letters; and
Legal opinions
12
Legal ConsiderationsKey Differences with Conventional Offerings
Conventional offerings usually can be completed within 1 week to 3 weeks
The prospectus must be accurate and complete during the time of the offering and through the closing (and through any “green shoe” closing)
ATMs, on the other hand, involve continuous sales on a daily basis into the market; depending upon the stock’s liquidity, an ATM program can take several weeks to complete and often span quarterly earnings announcements
As a result, during an ATM, the Company and the investment banks must engage in ongoing due diligence, and the Company must update the prospectus and its public disclosures whenever, during the program, there are developments in its business and operations
The Company may be required to make multiple filings with the SEC in order to keep its public disclosures and its prospectus updated
The Company’s accountants will be requested to deliver updated “comfort letters” and the Company’s and the investment bank’s counsel will be required to bring down their legal opinions and “negative assurance” letters every few weeks
An ATM program may be temporarily halted to allow time for the Company to update its public disclosures and for its accountants and counsel to deliver their updating letters and opinions
13
Legal ConsiderationsATM Equity Offering Documentation Requirements
An effective shelf registration statement on Form F-3 or S-3 filed by a Company that is eligible to use such a Form for primary offerings of its own securities
A prospectus or prospectus supplement that, in most instances, relies principally on the disclosure in the Company’s annual report (Form 10-K or 20-F) and quarterly and other information filed with the SEC. That prospectus or prospectus supplement usually focuses on recent developments and any significant risk factors and describes the proposed ATM program
A sales agency agreement with the investment bank (or banks) that will execute the ATM program. The agreement looks very much like a standard underwriting agreement, except:
There is no “firm commitment” by the investment bank to purchase or sell any fixed number of securities, and
Either the Company or the investment bank can terminate the agreement at any time, regardless of whether the program has been completed
14
Legal ConsiderationsKey Process Milestones
Conduct due diligence, prepare the prospectus supplement
Sign the sales agency agreement, obtain the accountants’ comfort letter and the legal opinions
File the prospectus supplement and, if appropriate, issue a press release
File any required listing applications with the stock exchange
Commence selling
Each day’s sales will be settled on the usual T+3 business days cycle
Continue due diligence, update the prospectus and the Company’s public disclosures, as necessary, and bring down the comfort letters and legal opinions
Since an ATM program is an ongoing offering of securities, all participants in the program must observe – while the ATM program is ongoing – the normal restrictions on public statements, media interviews and other forms of publicity that apply in conventional offerings
Complete the ATM program and announce the number of shares sold, the offering proceeds, etc.
Key Takeaways
15
Key Takeaways
ATM is a useful tool to opportunistically access equity capital markets
The program takes advantage of the liquidity in public equity markets
Numerous companies across many different industries have utilized this technology
Benefits include no discount to market prices, no impact on daily share price and ability to customize program
Considerations include duration of offering, uncertainty of share price achieved at commencement of program and on-going diligence and compliance requirements
Bank of America Merrill Lynch Credentials
$951
$1,781$1,953$2,084$2,231$3,014
$3,693
$5,248
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
CITI UBS BEAR MS JEFF JPM WACH
$581$620$634$707$868
$1,491
$2,081
$2,525
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
CITI UBS MS JEFF JPM CANTOR BEAR
16
U.S. Listed Shipping Equity Since 2005 ($ in millions)
U.S. Listed Shipping IPOs Since 2005 ($ in millions)
Leader in U.S. Shipping Equity IssuanceBank of America Merrill Lynch Credentials
____________________Source: ECM Analytics, as of May 28, 2009. Full credit to each bookrunner.Note: The list of IPO’s above excludes two BofA bookrun IPOs, Oceanfreight and Britannia Bulk.
# of Transactions 28 21 23 14 12 10 11 7
# of Transactions 11 9 8 4 4 3 3 3
First containership leasing companyLargest shipping IPO in U.S. marketML executed 3 large follow-on offerings
Reopened shipping IPO market after 6 month hiatus
Transaction marketed at an exceptionally tough timeML has executed 3 successful follow-on offerings
EBITDA multiple expansion from 6.5x to 10.0xML executed successful follow-on
Deal completed in extremely difficult drybulk marketIPO focused on growth rather than yield
Innovated first "C-Corp" MLP facilitating investor participationInnovated OLP structure
Deal priced above the filing rangeVery strong institutional investor interest
First-ever dry-bulk MLPDeal priced in very difficult market
Marine Money Shipping IPO of the Year 2008Reopened shipping IPO market after 6 month hiatus
August 2005
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Seaspan Corporation
$605,776,000October 2005
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Double Hull Tankers
$199,200,000June 2005
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
TBS International Limited
$85,125,000March 2007
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Capital ProductPartners L.P.
$290,518,750November 2007
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Navios Maritime Partners L.P.
$210,000,000December 2006
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Teekay Offshore Partners L.P.
$169,050,000October 2006
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Danaos Corporation
$215,300,000May 2008
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Safe Bulkers
$190,000,000October 2005
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
American Commercial Lines
$199,237,500
September 2007
Bank of AmericaMerrill Lynch
Acquisition of Bulk Shipping Assets from
COSCO Bulk, COSCO Qingdao, COSCO Shenzhen and COSCO HK Shipping
Exclusive M&A Advisor to China COSCO Holdings
COSCO
$4,600,000,000
17
Bank of America Merrill Lynch has advised on over $12 billion in transactions for 23 shipping clients
Bank of America Merrill Lynch Credentials
August 2005
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Seaspan Corporation
$605,776,000
October 2006
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Danaos Corporation
$215,250,000
November 2006
Bank of AmericaMerrill Lynch
Add-On Offering
Joint Bookrunner
Seaspan Corporation
$247,250,000
April 2007
Bank of AmericaMerrill Lynch
Add-On Offering
Joint Bookrunner
Seaspan Corporation
$161,238,750
August 2007
Bank of AmericaMerrill Lynch
Add-On Offering
Joint Bookrunner
Seaspan Corporation
$148,725,000
April 2008
Bank of AmericaMerrill Lynch
Add-On Offering
Joint Bookrunner
Seaspan Corporation
$219,362,500
Container Shipping
Drybulk
Drybulk and Container Shipping (Since 2005)
June 2005
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
TBS International Limited
$85,125,000
December 2006
Bank of AmericaMerrill Lynch
9.5% Fixed RateSenior Notes
Due 2014
Joint Bookrunner
Navios Maritime Holdings Inc.
$300,000,000
August 2006
Bank of AmericaMerrill Lynch
Reg. S Contingent Conversion Zero
Coupon Convertible with Acquisition Rights
Bonds due 2026 Offer Price: 102.5
Sole Manager
Mitsui
JPY55,000,000,000(~$470,000,000)
November 2007
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Navios Maritime Partners L.P.
$210,000,000
September 2007
Bank of AmericaMerrill Lynch
Convertible Bond Offering
Joint Bookrunner
Thoresen Thai Agencies
$170,000,000
December 2007
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Mercator Lines Limited
$142,000,000
Initial Public Offering
May 2008
Bank of AmericaMerrill Lynch
Joint Bookrunner
Safe Bulkers
$190,000,000
January 2009
$500,000,000
Bank of AmericaMerrill Lynch
ATM CommonEquity Offering
Sole Selling Agent
DryShips Inc.
May 2009
$475,000,000
Bank of AmericaMerrill Lynch
ATM CommonEquity Offering
Sole Selling Agent
DryShips Inc.
May 2007
Bank of AmericaMerrill Lynch
Add-On Offering
Joint Bookrunner
Navios Maritime Holdings Inc.
$132,250,000
May 2009
$41,538,000
Bank of AmericaMerrill Lynch
Add-On Offering
Joint Bookrunner
Navios MaritimePartners L.P.
June 2008
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
Britannia Bulk
$124,999,995
May 2008
Bank of AmericaMerrill Lynch
Add-On Offering
Joint Bookrunner
TBS International Limited
$173,400,000
April 2007
Bank of AmericaMerrill Lynch
Initial Public Offering
Joint Bookrunner
OceanFreight
$234,887,500
18
Bank of America Merrill Lynch has advised on over $12 billion in transactions for 23 shipping clients
Bank of America Merrill Lynch Credentials
ACLAmerican
Commercial Lines
April 2006
Merrill Lynch & Co.
Add-On Offering
Sole Bookrunner
American Commercial Lines
$64,680,000
ACLAmerican
Commercial Lines
October 2005
Merrill Lynch & Co.
Initial Public Offering
Joint Bookrunner
American Commercial Lines
$199,237,500
November 2007
Merrill Lynch & Co.
Initial Public Offering
Joint Lead Manager
OSG America L.P.
$142,500,000
September 2006
Merrill Lynch & Co.
Sole Advisor
On Sale to
$455,000,000Advisor to
December 2005
Merrill Lynch & Co.
Add-On Offering
Joint-Lead Manager
Maritrans
$96,000,000
Jones Act Market
International Tankers
International Tankers and Jones Act Market (Since 2005)
March 2007
Merrill Lynch & Co.
Initial Public Offering
Joint BookrunnerSole Structuring Agent
Capital Product Partners L.P.
$290,518,750
January 2007
Merrill Lynch & Co.
Add-On Offering
Sole Bookrunner
Double Hull Tankers
$69,276,000
December 2006
Merrill Lynch & Co.
Initial Public Offering
Joint BookrunnerJoint Structuring Agent
Teekay Offshore Partners L.P.
$169,050,000
October 2005
Merrill Lynch & Co.
Initial Public Offering
Joint Bookrunner
Double Hull Tankers
$199,200,000
October 2006
Merrill Lynch & Co.
Initial Public Offering
Joint-Lead Manager
Ultrapetrol (Bahamas) Limited
$137,500,000
$430mm Senior Secured Facilities$115mm Class B
Facility
August 2007
Merrill Lynch & Co.
Joint Bookrunner
Chembulk Tankers
$545,000,000
Berlian Laju Tanker Tbk
October 2007
Merrill Lynch & Co.
Sole Advisor
Advisor toChembulk Tankers
on Sale to
$850,000,000
December 2007
Merrill Lynch & Co.
Initial Public Offering
Co-Manager
Teekay Tankers
$224,250,000
June 2007
Merrill Lynch & Co.
Add-On Offering
Joint Bookrunner
Double Hull Tankers
$87,112,500
June 2008
Merrill Lynch & Co.
Add-On Offering
Joint Bookrunner
Teekay Offshore Partners L.P.
$147,500,000
June 2007
$43,971,975
Merrill Lynch & Co.
Add-On Offering
Sole Bookrunner
Double Hull Tankers
May 2009
7.0mm Shares
Bank of AmericaMerrill Lynch
ATM CommonEquity Offering
Sole Selling Agent
Ship Finance International Ltd
April 2008
Merrill Lynch & Co.
Add-On Offering
Joint Bookrunner
DHT Maritime
$96,600,000
March 2009
Merrill Lynch & Co.
Add-On Offering
Joint Bookrunner
DHT Maritime
$39,150,000
19
October 2006
Joint Bookrunner
$215MM
Initial Public Offering
March 2007
Joint Bookrunner
$291MM
Initial Public Offering
August 2005
Joint Bookrunner
$606MM
Initial Public Offering
Marine Money: Shipping IPO of the Year – 4 Years In A Row2007 2006 2005
Bank of America Merrill Lynch has garnered numerous awards for its ability to successfully execute for its transportation clients
Marine Money “Deal of the Year” AwardsBank of America Merrill Lynch Credentials
Marine Money: Other Deals of the Year Awards
2007 Add-On Offering2007 Private Equity Deal
April 2007
Joint Bookrunner
$161MM
Add-On OfferingSenior Secured and Second
Lien Term Loan
August 2007
$545MM
Joint Lead Arranger
Sole Advisor to Chembulk Tankers
On Sale To
October 2007
$850MM
Sole Advisor
Berlian Laju Tanker Tbk
2007 Financing Deal
2008
Bank of AmericaMerrill Lynch
May 2008
Joint Bookrunner
$190MM
Initial Public Offering
2008 Add-On Offering
April 2008
Joint Bookrunner
$97MM
Add-On Offering
Bank of AmericaMerrill Lynch
Bank of AmericaMerrill Lynch
Bank of AmericaMerrill Lynch
Bank of AmericaMerrill Lynch
Bank of AmericaMerrill Lynch
Bank of AmericaMerrill Lynch
Bank of AmericaMerrill Lynch
“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, which are both registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, locally registered entities.
Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed.
These materials have been prepared by one or more subsidiaries of Bank of America Corporation for the client or potential client to whom such materials are directly addressed and delivered (the “Company”) in connection with an actual or potential mandate or engagement and may not be used or relied upon for any purpose other than as specifically contemplated by a written agreement with us. These materials are based on information provided by or on behalf of the Company and/or other potential transaction participants, from public sources or otherwise reviewed by us. We assume no responsibility for independent investigation or verification of such information (including, without limitation, data from third party suppliers) and have relied on such information being complete and accurate in all material respects. To the extent such information includes estimates and forecasts of future financial performance prepared by or reviewed with the managements of the Company and/or other potential transaction participants or obtained from public sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflecting the best currently available estimates and judgments of such managements (or, with respect to estimates and forecasts obtained from public sources, represent reasonable estimates). No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall berelied upon as, a representation, whether as to the past, the present or the future. These materials were designed for use by specific persons familiar with the business and affairs of the Company and are being furnished and should be considered only in connection with other information, oral or written, being provided by us in connection herewith. These materials are not intended to provide the sole basis for evaluating, and should not be considered a recommendation with respect to, any transaction or other matter. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Bank of America Corporation or any of its affiliates to provide or arrange any financing for any transaction or to purchase any security in connection therewith. These materials are for discussion purposes only and are subject to our review and assessment from a legal, compliance, accounting policy and risk perspective, as appropriate, following our discussion with the Company. We assume no obligation to update or otherwise revise these materials. These materials have not been prepared with a view toward public disclosure under applicable securities laws or otherwise, are intended for the benefit and use of the Company, and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without our prior written consent. These materials may not reflect information known to other professionals in other business areas of Bank of America Corporation and its affiliates.
Bank of America Corporation and its affiliates (collectively, the “BAC Group”) comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and strategic advisory services and other commercial services and products to a wide range of corporations, governments and individuals, domestically and offshore, from which conflicting interests or duties, or a perception thereof, may arise. In the ordinary course of these activities, parts of the BAC Group at any time may invest on a principal basis or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions, for their own accounts or the accounts of customers, in debt, equity or other securities or financial instruments (including derivatives, bank loans or other obligations) of the Company, potential counterparties or any other company that may be involved in a transaction. Products and services that may be referenced in the accompanying materials may be provided through one or more affiliates of Bank of America Corporation. We have adopted policies and guidelines designed to preserve the independence of our research analysts. These policies prohibit employees from offering research coverage, a favorable research rating or a specific price target or offering to change a research rating or price target as consideration for or an inducement to obtain business or other compensation. We are required to obtain, verify and record certain information that identifies the Company, which information includes the name and address of the Company and other information that will allow us to identify the Company in accordance, as applicable, with the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) and such other laws, rules and regulations as applicable within and outside the United States.
We do not provide legal, compliance, tax or accounting advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by us to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. If any person uses or refers to any such tax statement in promoting, marketing or recommending a partnership or other entity, investment plan or arrangement to any taxpayer, then the statement expressed herein is being delivered to support the promotion or marketing of the transaction or matter addressed and the recipient should seek advice based on its particular circumstances from an independent tax advisor. Notwithstanding anything that may appear herein or in other materials to the contrary, the Company shall be permitted to disclose the tax treatment and tax structure of a transaction (including any materials, opinions or analyses relating to such tax treatment or tax structure, but without disclosure of identifying information or, except to the extent relating to such tax structure or tax treatment, any nonpublic commercial or financial information) on and after the earliest to occur of the date of (i) public announcement of discussions relating to such transaction, (ii) public announcement of such transaction or (iii) execution of a definitive agreement (with or without conditions) to enter into such transaction; provided, however, that if such transaction is not consummated for any reason, the provisions of this sentence shall cease to apply. Copyright 2009 Bank of America Corporation.
20
Notice to RecipientConfidential
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