Largest Bulk Shipper – Star Bulk Carriers – Sells a Debt Issue

Soon to be the largest dry bulk shipping company (over 100 ships when all mergers and new builds are included) Greek ship owner Star Bulk Carriers Corp (ticker:SBLK) has sold a 8% Senior Note offering.  This issue has a maturity date of 2019 and meets our need for shorter maturities.  We are a buyer.

This issue began trading today (11/10/2014) under the symbol SBLKL.  The issue traded in a range of $24.52 to $24.80 today

Note that one should carefully perform their own due diligence on Star Bulk Carriers – they are over 60% owned by Oaktree Capital (a MLP–ticker:OAK) which has over $93 billion in investments.  We have dug fairly deep and find Oaktree has been involved with a number of bankrupt shippers and appears to be putting together a huge bulk shipping group.  They were involved with Genco Shipping as well as Eagle Bulk and Excel Maritime—each was a large dry bulk ship owner prior to bankruptcy.  Oaktree has been involved with these companies exiting bankruptcy and appears to be in the process of rolling some of the assets into a mega ship owner.  Oaktree also has substantial representation on the board of directors and this is the first time I can remember a Greek shipper begin controlled by a U.S. company.

This is a somewhat complex company at this time–but let us say that Oaktree Capital is not involved to lose money and we believe their involvement will lend stability and provide direction to Star Bulk Carriers management.

Details of this issue are here.