Safe Bulkers to raise $113m in Athens bond issue

The Polys V Hajioannou- led Safe Bulkers is seeking to raise EUR100m ($113m) to fund further fleet expansion.

The owner of 49 ships of 4.4m dwt, Safe Bulkers’ bookbuilding will run between 9 – 11 February led by local lenders Piraeus Bank, Alpha Bank and Optima Bank and broker Euroxx Securities. The bonds are to start trading on the Athens Exchange, on 14 February.

The company has been running advertising campaign on local TV seeking investors before joining NYSE-listed Costamare, which last May opened the Athens shipping bond market also raising EUR100m through the sale of unsecured five-year 2.7%-yielding notes.

Formally, Safe Bulkers intends to use the bond proceeds to finance the acquisition of four ships that are already in its fleet. However, selling of the bonds will diversify its sources of funding in a local market keen to invest in shipping debt.

Indeed, Hajioannou said “the Athens Stock Exchange has nothing to fear related to stock exchange around the world”. He said the company has a strong cashflow and low loans and can “face the challenges that may appear and develop the opportunities that may appear”.

In October, the Constantakopoulos-backed Costamare was joined by Evangelos Marinakis' Nasdaq-listed Capital Product Partners which successfully sold a bond in Athens with a volume of EUR150m. Capital's five-year unsecured paper pays a coupon of 2.65%.

Institutional investors like Greek banks, which bought about a third of the bonds sold by Costamare and Apital Product Partners, have been lending to the industry for decades. Private investors bought just over 70% of the Costamare bond and 67% of the Capital one. Safe Bulkers has set aside at least 30% of the bonds it plans to sell for institutional investors. The rest is to be divided up between institutional and retail ones.

The bond sale will boost Safe Bulkers' liquidity to about $350m, enabling the company to finance further ship acquisitions or other "general corporate purposes".

The bond sale prospectus revealed Safe Bulkers has nine high-spec bulker newbuildings under construction in Japan for delivery between June 2022 and January 2024.

Hull numbers disclosed suggest a pair of 82,000 dwt kamsarmaxes are booked at Shin Kurushima Sanoyas and seven kamsarmaxes and post-panamaxes at Oshima Shipbuilding. A further 11 eco-bulkers were ordered between 2012 and 2014.

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