Rickmers Maritime Trust

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(06-10-2016, 11:56 AM)donmihaihai Wrote:
(05-10-2016, 07:36 AM)ValueMushroom Wrote:
(05-10-2016, 02:02 AM)donmihaihai Wrote:
(04-10-2016, 09:11 PM)ValueMushroom Wrote: Yup probably attracted by the high yield... they shld know higher yield higher risk...

higher dividend yield higher risk? And equity has higher risk than bond

Same bond class; one is offering 3% coupon payment and the other is offering 8% coupon payment, this usually means the higher yield bond has a higher risk of default.

What i meant was equity higher risk than bond. 
Using yield as the measurement. Isnt higher dividend yield stocks have more risk than bond?

You can't use purely yield for dividend yield stocks which have a 90% or more payout ratio of their cash (e.g. REITS and Trusts). Unless you assume a terminal cashflow (just like a bond). Then there's the uncertainty of the cashflows.

In general, I regard the REIT universe in Singapore as semi-permanently underpriced these last several years. Their yield spread against 10Y government bonds is persistently high.

Also, with bonds in Singapore, except for the paltry handful of retail bonds, you can't access diversification. Obviously if you invested 250k in a single equity - you could run into trouble just like our bond holders. There are probably a few thousand bonds on the market - if you could spread your investments in say, 40 bonds, then any single bond default would have a minor effect on your portfolio. This is why MAS is trying to get the secondary bond market to be able to issue lower denomination bonds (e.g. via seasoned bond framework).

I would really welcome a Singapore corporate bond ETF. The lack of bond diversity for the small (and not so small) investor is very irritating. Even more, I would welcome "target maturity bond ETFs" just like those that ishares sells in the US - this is where the ETF packages bonds of a similar maturity and then *never* changes composition. At each bond maturity, holders just get the maturity cashflow back as a "hold till maturity" thing.

I say again. The real problem is not that a bond default occurred or that there was mis-selling. The real problem is the lack of diversification available.
(06-10-2016, 03:41 PM)CityFarmer Wrote: The order of course-of-effect, is important. High-risk, thus compensated by high yield. It isn't high yield, thus high risk.

Equity yield, isn't on dividend yield alone, but on earning yield.
Agreed. And earning yield is a function of price and earning. Dividend yield is the function of price and dividend payout.

While earning and dividend payout are strictly not the same. Price remain unchange. So lower the price, higher the yields.


Rickmers is going ahead with its revised proposal.
I will be very interested to see how noteholders and shareholders will vote.

My view still stands: they will vote in favour of the proposal; effectively kicking the can down the road. Depressed shipping prices are likely to remain for another 5 more years
Rickmers Maritime posts 3Q16 net loss of US$74.7 mil
You can find more of my postings in http://investideas.net/forum/
(31-10-2016, 08:44 PM)Behappyalways Wrote: Rickmers Maritime posts 3Q16 net loss of US$74.7 mil

Close to game over for shareholders. After decommisioning 5 vessels, the revenue has fallen sharply, so badly that the revenue is just enough to pay for operating expenses and interest rate on the bank loans... that's very very sad. i dont think shareholders can collect any more dividend / distribution for easily the next 10 years (unless there is a sharp incresase in the charter rates for some unexpected reason, low chance though )
During the GFC, I remember there was a young (?) guy at the EGM/AGM saying he owns 1% of Rickmers before asking some questions.
Dont know if he still hold 1%...
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster

I am surprised by Rickmers results, the bondholders has voted "no" to it.

Interested to see if the company will produce another enticing offer to let bondholders reconsider
waos!! i am very surprised too!! bondholders willing to walk away now??!! Tongue

figure Rickmers has to start selling ships liao....
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
Didnt track the issue. What will most likely happen to bond holders and share holders?
(16-09-2016, 02:09 PM)CY09 Wrote: Come to think of it.

Estimated value of current Rickmers fleet + cash = approx US$150 mil (SGD 200mil).

Debt in order to seniority
1) Bank Loan - USD 281.4mil (s$383 mil)
2) Bond Holders (unsecured) - s$100 mil

Seen in this light, I think my view has changed; it is better for bondholders to roll over their debts. This is because earning the interest is better than letting the company fall, where it is almost impossible to secure a valuation of above s$360 mil for its 16 ships when current rates are at $5,110 per day. However, they must fight that they are always ranked second to banks and not be demoted to perpetual securities/preference shares, who may be surpassed by other debtors.

As for shareholders reading this post, It is almost impossible to get anything (unlike China Fishery's bankruptcy saga where the rejected bidders bid for its Peru Ops was more than CF stated liabilities)

Shareholders confirm get nothing in liquidation.

Bondholders (unsecured crediotrs) are likely to get nothing as the banks are ahead of them in line. Given rickmer's vessel valuation on market is lesser than the bank's principal lent.

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