Moody's Downgrades Navigator Gas

Tuesday, February 29, 2000
Moody's Investors Service has downgraded the rating of Navigator Gas Transport's first priority ship mortgage notes due 2007 to Caa2 from Caa1, and the second priority notes due 2007 from Ca to C. The senior implied rating was reduced to Caa2 from the previous B3. The rating outlook is negative. The rating downgrade primarily reflects the reduction in earnings capacity of the ships due to the continued weak rate environment of the transport market for petrochemical gasses, the concurrent decline in the market value of the ships under construction (collateral for the notes), the fragility of the company's balance sheet due to the high leverage, and increasing expectations that restructuring options will likely be explored and effected with the bondholders. Current freight rates are estimated to be at about $500,000 per month compared with a market rate of approximately $750,000 at the time of the August 1997 offering and the $1.3 million then projected for year 2001. The impact of the significantly lower freight rates has increased the likelihood of reliance on the letter of credit structure covering interest shortfalls on the first mortgage notes of up to two years from initial delivery ($40 million) and working capital ($5 million) during start-up operations. Up to two years of interest payments on the second priority notes can be deferred. Drawings under the letter of credit are secured by a super priority lien on the vessels effectively subordinating both the first and second mortgage notes. The rating downgrades also consider the delays in delivery of the five petrochemical carriers. The first vessel is about to go on sea-trials, with delivery, barring discrepancies, now expected to be in late March, versus the originally scheduled August 1, 1999 date. The fifth, and final vessel, is expected to be delivered in February 2001, versus the original September 1, 2000 schedule. The company believes that a minimum of three vessels is necessary in order to execute its business strategy of providing regularly scheduled global sailings and ports-of-call for the delivery of industrial gasses. To date, the company has identified no firm employment for the vessels and cannot commit to short-term charters until vessel availability is certain.
Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Offshore

Rederij Groen Takes Delivery of 7-Waves

Rederij Groen’s entire SRSV fleet built by Damen Maaskant Shipyards Stellendam. Dutch offshore services company Rederij Groen has taken delivery of the 7-Waves,

New Oil Field Found in British North Sea

GDF SUEZ E&P UK Ltd and BP today announced a new exploration discovery in the UK Central North Sea. The discovery, which spans GDF SUEZ operated block 30/1f

Three Dead in Offshore Platform Accident

Three workers were killed and one is still missing after an accident at one of the offshore oil and gas platforms in the Caspian Sea in Azerbaijan, Azeri state energy company SOCAR said on Thursday.

Finance

WFW Advises ING Bank on $340m Loan Facility for Euronav

Watson, Farley & Williams (WFW) has advised ING Bank N.V. (ING) as sole bookrunner and facility agent for a syndicate of banks on a $340 million loan facility made available to Euronav NV.

Clean Marine Wins New Contract

Clean Marine has been selected by Hyundai Mipo Dockyard in South Korea to supply exhaust gas cleaning systems (EGCS) for two new MR tankers. IMO’s convention

Moore Stephens Expects Vessel Operating Cost to Rise

Vessel operating costs are expected to rise by almost three per cent in both 2014 and 2015, according to a new survey by international accountant and shipping consultant Moore Stephens.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Naval Architecture Navigation Pipelines Pod Propulsion Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1364 sec (7 req/sec)