Maersk issues first ever bonds for capital

Maersk issues first ever bonds for capital    A.P. Moller – Maersk has for the first time in its history issue bonds to raise capital for potential acquisitions and debt repayments.
   The shipping giant, No. 1 in the world in terms of containership fleet capacity, sold 750 million euros ($1.13 billion) in bonds, it emerged Friday. That follows the $1.8 billion the company said it intended to raise through a sale of new shares in the company in September.
   In August, during the release of its first half financials, A.P. Moller – Maersk Group Chief Executive Officer Nils Andersen indicated the company was eyeing bond sales. At the time, he said the group was getting all the support it needed from banks, but that it was looking to diversify its lending activities.

Andersen

   According to a report in Lloyd's List, the group has $19.3 billion worth of debt on its books. The company lost nearly $1 billion in the first half — of which the container shipping division, Maersk Line, lost more than $900 million. But Andersen said in August that no debt refinancing would be needed before 2012 and that the container line's fleet expansion program is almost fully financed.
   The bond sale was extremely successful, with A.P. Moller – Maersk receiving orders for 5 billion euros (in other words, 6.6 times what was being offered by the company).
   An analyst in London interviewed by Bloomberg said that now was the right time for the company to issue bonds, given that investors have been hoarding cash and looking for new instruments in which to invest.
   For Maersk, the sale amounts to a financial buffer that other lines will struggle to match. A host of struggling carriers have had to seek help from shareholders or their government to stave off credit and day-to-day cash flow problems. Low freight rates and depressed demand have dampened the revenue-earning power of all major carriers.
   That leaves Maersk in the enviable position of being able to acquire distressed assets or companies at attractive rates. ' Eric Johnson