Corporate Bonds: Booming Market – New Ways of Funding

By Anastasia Vamvaka

The public offering of the bond of CPLP Shipping Holdings PLC, with the guarantee of Capital Product Partners LP (CPLP), in the amount of 100 million euros, was completed with particular success. The issue was oversubscribed by 3.6 times, raising funds of 360 million euros, while the final yield of the bonds was 4.4%.

The total public offering is 100,000 bonds with a nominal value of 1,000 euros each, with a minimum subscription amount of 1,000 euros and a total duration of seven years. The Issuer has the option of early repayment of part or all of the KOD after the second year has passed and at the end of each interest period.

The €100 million bond is the second issued by CPLP Shipping Holdings PLC. The first, amounting to 150 million euros, was issued in October 2021 and is traded in the Fixed Income Securities Category of the Regulated Market of the Athens Stock Exchange under the symbol CPLPB1.

The market boom

The successful issuance of CPLP Shipping’s €100 million corporate bond confirms the booming corporate market. Before the issue of CPLP Shipping, in 2022 Lamda Development had previously issued a bond of 230 million euros, in which more than 14,000 private investors participated, which is a record for Greek data.
The successful issuances of corporate bonds also show the great potential of the domestic stock market and its contribution to the country’s development path. In addition to listed companies, market players estimate that bonds will also be issued by unlisted companies, as CPLP Shipping and in 2021 Costamare did. Today, 20 corporate bonds with a total issue value of 3.63 billion euros are traded on the domestic corporate bond platform of the Athens Stock Exchange.

New investments

The Group of Guarantor CPLP recently announced a development investment program of USD 597.5 million expected to be implemented in the period between October 2022 and May 2023 and envisages the strengthening of the fleet with 4 state-of-the-art newbuild vessels, 3 container vessels and 1 vessel LNG.

Upon completion of the investment program, the group’s fleet is expected to consist of 23 high-standard vessels, consisting of 7 last-generation liquefied natural gas (LNG) vessels, 15 container vessels and 1 dry cargo vessel. The aforementioned investment program is fully in line with the permanent business strategy of the Guarantor group, which consists in acquiring and maintaining high-quality ships on long-term charters to large and financially strong charter companies with the aim of always strengthening and predictability of its future cash flows and the creation of goodwill for its shareholders.

The fleet

The average time charter duration of the fleet including all 4 vessels under acquisition totals up to 10.1 years and translates into total chartered revenues of up to $2.6 billion. In addition, the investment program under execution follows the group’s expansion into the liquefied gas transportation sector through the purchase of 6 state-of-the-art LNG vessels during the 2nd half of 2021, a move that also emphatically signals the group’s shift to sectors and technologies of more environmentally friendly shipping, thus contributing to the transition to “green” maritime transport.