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Opening Remarks
29th Annual Marine Money Week June 22, 2016
Jefferies LLC
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Opening Remarks 29 th Annual Marine Money Week June 22, 2016 - - PowerPoint PPT Presentation
Opening Remarks 29 th Annual Marine Money Week June 22, 2016 - - PowerPoint PPT Presentation
Opening Remarks 29 th Annual Marine Money Week June 22, 2016 Jefferies LLC Buying a Bargain or Catching a Falling Knife? 2 Market Snapshot June 2015 June 2016 Global GDP Growth (1 Yr Fwd) 2.9% 2.4% Brent Crude Oil ($/barrel) $63.87
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Source: EIA, Bloomberg, Clarksons, United States Treasury, World Bank. Note: Statistics as of June 17, 2015 and June 17, 2016.
Market Snapshot
June 2015 June 2016 Global GDP Growth (1 Yr Fwd) 2.9% 2.4% Brent Crude Oil ($/barrel) $63.87 $49.17 10-Year U.S. Treasury Rate 2.32% 1.62% Single B High Yield Index 6.48% 7.53% Baltic Dry Index 725 587
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50 100 150 200 250 300 Jun-2015 Sep-2015 Dec-2015 Mar-2016 Jun-2016 S&P Index VIX High Yield Single B Brent Crude
(23.0)% +33.9% +16.2% (1.4)%
February Market Bottom
Source: Bloomberg, CapitalIQ. Note: Statistics as of June 17, 2015 and June 17, 2016.
Overall Market Performance
Jun-15 Jun-16 Percent Change S&P Index 2,100 2,071 (1.4)% VIX 14.50 19.41 33.9% Brent Crude $63.87 $49.17 (23.0)% High Yield Single B 6.48% 7.53% 16.2%
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Source: Bloomberg. Note: Statistics as of June 17, 2015 and June 17, 2016.
S&P: Recovering from February’s Market Bottom
1,650 1,700 1,750 1,800 1,850 1,900 1,950 2,000 2,050 2,100 2,150 2,200 Jun-2015 Oct-2015 Feb-2016 Jun-2016
(1.4)% Decrease since June 2015
Jun-15 Jun-16 Percent Change S&P Index 2,100 2,071 (1.4)%
+1.3% Increase since June 2015 February Market Bottom (9.1)% decrease since January 2016 and (12.9)% decrease since June 2015
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200 400 600 800 1,000 1,200 1,400 Jun-2015 Oct-2015 Feb-2016 Jun-2016
(19.0)% Decrease since June 2015
Source: Bloomberg. Note: Statistics as of June 17, 2015 and June 17, 2016.
Baltic Dry Index: The Rise and Fall
+68.5% Increase since June 2015 February Market Bottom (38.7)% decrease since January 2016 and (60.0)% decrease since June 2015
Jun-15 Jun-16 Percent Change BDI 725 587 (19.0%)
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(1) Clarkson index based on $/day per TEU; current month shows latest available end month data. Source: Clarksons.
Indexed Timecharter Rates
50 100 150 200 250 Jun-2015 Sep-2015 Dec-2015 Mar-2016 Jun-2016 VLCC MR Capesize Clarkson Containership index
February Market Bottom
(34.0)% (37.1)% (13.0)% (20.0)%
Jun-15 Jun-16 Percent Change VLCC $47,500 $38,000 (20.0)% MR $18,250 $15,875 (13.0)% Capesize $12,125 $7,625 (37.1)% Clarkson’s Containership Timecharter Rate Index (1) 62 41 (34.0)%
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Source: Capital IQ. Note: Indexes are market capitalization weighted. “Tankers” represents Crude, Product, and Mixed Fleets. Share prices as of June 17, 2015 and June 17, 2016.
Rates Continue to Drive Share Price Performance
25 50 75 100 125 150 Jun-2015 Sep-2015 Dec-2015 Mar-2016 Jun-2016 Tankers DryBulk Container S&P
(70.8)% (41.0)% (36.3)% (1.4)%
February Market Bottom
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$46.0 $36.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0
Jun-15 Jun-16 Capesize Resale Prices
$37.5 $35.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0
Jun-15 Jun-16 MR Resale Prices
Source: Clarksons Note: Values as of June 19, 2015 and June 17, 2016.
Asset Values Sliding
$105.0 $88.0 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 110.0
Jun-15 Jun-16 VLCC Resale Prices
(16.2)% (6.7)% (21.7)%
($ millions)
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Source: Dealogic.
Shipping Capital Markets Activity Last 12 Months
$205 $417 $52 $170 $1,276 $685 $2,621
$1,532 $855 $0 $2,871 $0 $417 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 Dollar Volume of Capital Raises July 2014 – June 2015
$250
($ millions)
$90 $200 $120 $324 $115 $75 $200
$120 $324 $115 $275 $200 $90
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000
Dollar Volume of Capital Raises July 2015 – June 2016
($millions)
Total Number of Deals: 27 Total Capital Raised: $5.7 billion Total Number of Deals: 10 Total Capital Raised: $1.1 billion High Yield Debt Equity Term Loan B
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Source: Wall Street Journal, Tradewinds.
Recent Shipyard Woes
Date Shipyard Country Status
Jun-16 Hyundai Merchant Marine Co. South Korea Lowered charter rates to get a debt- revamp plan Jun-16 STX Offshore & Shipbuilding South Korea Court-led restructuring plan May-16 Zhong Chuan Heavy Industry Shipbuilding China Declared bankrupt along with two affiliate companies Zhong Chuan Heavy Industry Equipment and Zhoushan Xuhua Metal Materials Feb-16 Sainty Marine Co China Bankruptcy filing accepted Jan-16 Wuzhou Shipbuilding China Filed for bankruptcy liquidation Nov-15 ShinaSB South Korea Filed for bankruptcy Jul-15 Mingde Heavy Industry China Declared bankruptcy Apr-15 Zhuangji Shipbuilding China Filed for bankruptcy Mar-15 Zhejiang Zhenghe Shipbuilding Co China Filed for restructuring at a district court Mar-15 Jiangsu Eastern Heavy Industries shipyard China Filed an application for debt and liabilities restructuring Mar-15 Dongfang Heavy Industry China Filed for bankruptcy
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Buying a Bargain or Catching a Falling Knife?
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