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FSL Trust - starting to see value in it

grandmaster89
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13-Apr-2010 10:39

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Assuming it declines, wouldn't the inflation simultaneously cause a rise in future charter freights and reduction in real debt ? I believe it uses derivatives to hedge against price movements of the US$.

sureesh40 ( Date: 13-Apr-2010 09:42) Posted:

But the problem is their dividend is paid out and converted from UD $. The US $ is a notorius currency, it is volatile and some people say will decline in the long term. How is FSL managing this risk

grandmaster89 ( Date: 23-Mar-2010 19:45) Posted:

FSL Yield is 13.88% (based on S$0.605)

Both trusts have similar yields hmm

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sureesh40
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13-Apr-2010 09:42

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But the problem is their dividend is paid out and converted from UD $. The US $ is a notorius currency, it is volatile and some people say will decline in the long term. How is FSL managing this risk

grandmaster89 ( Date: 23-Mar-2010 19:45) Posted:

FSL Yield is 13.88% (based on S$0.605)

Both trusts have similar yields hmm

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grandmaster89
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13-Apr-2010 00:16

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People buy this for dividend...

Hulumas ( Date: 12-Apr-2010 23:37) Posted:

Slow moving counter, I give it a miss.

commando ( Date: 12-Apr-2010 19:10) Posted:

Yap...money come come

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Hulumas
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12-Apr-2010 23:37

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Yells: "INVEST but not TRADE please!"

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Slow moving counter, I give it a miss.

commando ( Date: 12-Apr-2010 19:10) Posted:

Yap...money come come

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commando
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12-Apr-2010 19:10

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Yap...money come come

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grandmaster89
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12-Apr-2010 18:41

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Hi Guys,

First Ship Lease Trust has just released their results reporting dates for 1Q 10.

1Q 10 Results Announcement: 20 April 2010

Unit Distribution XD: 26 April 2010

Distribution Payable: 26 May 2010

8 more days to results. Looking forward to US$0.015 distribution.

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commando
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08-Apr-2010 19:33

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vested

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grandmaster89
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08-Apr-2010 18:53

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There are a few key differences between FSL Trust and the other 2 shipping trust listed here ie Rickmers and PST.

1) Business trust tend to have sponsors in the similar line - a REIT would have a property developer while a shipping trust will have a shipping line as its sponsor. This gives rise to the possibility of 'asset-dumping'. Both Rickmers and PST have their respective parent shipping line as their sponsor. This isn't a bad thing since there is a strong parent and in PST case, the bulk of its vessels are tied to its parent hence ensuring stable cash-flow.

FSL Trust is unique because despite being a shipping trust, its sponsors are maritime banks - HSH Nordbank AG (world largest shipping financier), UniCredit Group (European bank with 10,000 branches) and Schoeller Holdings Ltd (private owned conglomerate dealing with ship management, ship owning, hotels and restaurants). This reduces the risk of asset-dumping and actually forces FSL Trust to remember that it is foremost an alternative financing company as opposed to a shipping line.

2) FSL Trust charters its vessels under bareboat charters under Hell and High Water contracts. This means that the charter provides the manpower, deals with the operational cost, maintenance of the vessel and will even pay for the charter even if the vessel is non-operational. In FSLT eyes, it is not a shipping line (it is a financier) hence it shouldn't be taking unnecessary risk like vessel maintenance and operational and manpower cost. I believe Rickmers and PST deals primarily with time charter whereby the Trust provides manpower and deals with the operational and manpower cost. I believe they do so simply because they see themselves as part of a shipping group and hence would have the capability to do so. Naturally, a time charter would be of a higher margin though I feel the trust would be taking on unnecessary risk and expenses.

3) FSL Trust is the only shipping trust with a Chief Risk Officer to deal with financial risk within the Trust and counter-party risk with the various leases. Since FSL Trust sees itself as a financier, it wants to diversify its 'loans' to as many parties as possible to reduce default risk. I believe this is why FSL has the most diversified portfolio with vessels of various classes being chartered out to different leases. FSLT intends to reduce their exposure to each leasee to 10%.

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grandmaster89
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29-Mar-2010 16:33

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PST and FSL launch a JV and share the spoils haha !!!

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pharoah88
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29-Mar-2010 16:23

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WiLL FSL be a WHITE KNIGHT to buy over some of RMT's NEW SHIPS?

WiLL PST be a WHITE KNIGHT to buy over some of RMT's NEW SHIPS?

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pharoah88
Supreme

29-Mar-2010 11:48

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bOth   FSL and

PST can PiCK appropriate RMT new ships

(which are perhaps worth about half of what they cost)

and BiD  from one-tenth to one-quarter of cost at the AUCTION.

SHIP Assets  Auction by China Banks happened in 2007.

# # # # # # # # # # # # # # # # # # # # # # # # #

christan ( Date: 26-Mar-2010 11:08) Posted:

this will total wipe off the equity 395m, making -equity, worth nothing. better avoid
Implications of the April maturity of the US$130m loan
facility. RMT had US$110.7m in cash as of 31 Dec but the
question is if the remaining seven lenders will be willing to
release that cash to only three lenders, considering the
outstanding capital commitment of US$918.6m and the very
likely breached loan-to-value covenants on the existing
US$773.8m loans. The key determinant of the outcome is
how close the banks and the sponsor are to reaching an overall
agreement (which is in approximately month 12 of
discussions). We re-iterate that it is not in the sponsor's best
interest for RMT to default as the sponsor will end up footing
the bill for the new ships (which are perhaps worth about half
of what they cost). The lenders are probably not keen to see
a default situation either (especially if they also lend to the
sponsor). The likely outcome is that the burden will eventually
be passed to RMT's unitholders through dilution via fresh
equity.
Uncertainty driving volatility - witness thehttp://www.remisiers.org/research//Rickmers%20Maritime-100325-OIR.pdf

Hulumas ( Date: 24-Mar-2010 14:58) Posted:

Too slow moving and relatively long term yet low yield.

pharoah88 ( Date: 24-Mar-2010 11:09) Posted:

Rickmers Maritime: Vessel secures new employment at 65% great discounts

Summary: Rickmers Maritime (RMT) announced that its vessel - Kaethe C. Rickmers (formerly Maersk Djibouti) - has secured employment with South American liner CSAV. The agreement is for a one-year charter at US$8,288 a day, and also gives CSAV the option to renew the charter for another 12 months at US$23,888 a day. We note that the vessel was earlier earning US$22,708 a day with Maersk. The US$8,288 rate is below our estimate of US$10,000 a day - but it is a far better alternative to not securing any employment at all (which had seemed a likely possibility a few weeks ago).

We note that CSAV is a current charterer of Pacific Shipping Trust;

the liner has made great strides in resolving its own financial difficulties.

Meanwhile, RMT's auditor Pricewaterhouse Coopers (PwC) said it was not in a position to express an opinion on the trust's FY09 results due to unresolved negotiations on maturing loans and large capital commitments. RMT's unit price fell 26% yesterday as a result (even though there was no new information except for the Business Times reporting that its sources say a deal has yet to be struck with the banks). We will be adjusting our earnings estimates to reflect the new CSAV charter.

In the meantime, we maintain our SELL rating and S$0.18 fair value for RICKMERS MARITIME . (Meenal Kumar)

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grandmaster89
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29-Mar-2010 11:37

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FSL Trust has released its 2009 Annual Report. I like the heading - Focused, Stable, Long-Term !!!

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grandmaster89
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23-Mar-2010 19:45

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FSL Yield is 13.88% (based on S$0.605)

Both trusts have similar yields hmm

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pharoah88
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23-Mar-2010 19:33

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PST dividend yield 2009 is 13% (based on USD0.275)

kingster ( Date: 26-Jan-2010 09:27) Posted:

ya... as mentioned in its report, it is giving out stable returns... so a yield of around 14% is quite attractive for me... vested too!

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grandmaster89
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23-Mar-2010 19:25

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AGM is on 14 April 2010.

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grandmaster89
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13-Mar-2010 17:08

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The problem with PST is their lack of diversification. They have only container ships which are the worst hit. They have yet to settle their problem with CSAV and any decrease in rates will mean lower income for the Trust. They may have the best balance sheet but their operations are not in a good shape.

pharoah88 ( Date: 13-Mar-2010 17:02) Posted:

Pacific Shipping Trust pays US$0.0175 this quarter.

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pharoah88
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13-Mar-2010 17:03

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Correction, the number is a mistake.

pharoah88 ( Date: 13-Mar-2010 17:02) Posted:

Pacific Shipping Trust pays US$0.0175 this quarter.

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pharoah88
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13-Mar-2010 17:02

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Pacific Shipping Trust pays US$0.0175 this quarter.

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grandmaster89
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13-Mar-2010 15:07

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I also see the value in this. I don't think the dividends will go down and lower since they have managed to refinance their debts with earliest repayment in 2012.

Operational Cash-Flow: US$16 million

Quarterly Loan Principal Repayment: US$8 million

Distribution: US$8 million (US$0.015 per share)

Recently, they did a placement and now have a cash-hoard of over US$50 million. They intend to use it to acquire vessels on a sale and lease back contract. This will add to the income and cash-flow and hence possibly increase our dividends.

By 2012, FSL would have paid back over US$64 million worth of debt hence making it easier to refinance it.

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pharoah88
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26-Jan-2010 18:41

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Are all the DEBTS cleared?

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