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Lambros Papaeconomou  

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  • A Few Thoughts On Greek Shipping And Taxes [View article]
    My best off the cuff guess would be 50% of the fleet is foreign flagged. I will try to get a more informed answer for your.
    Jul 24, 2015. 04:00 PM | Likes Like |Link to Comment
  • Why Is Diana Shipping Issuing High-Yield Securities? [View article]
    Thank you for your kind words. SB has indeed lower vessel operating expenses than DSX. Please refer to the table found in my recent article:

    For year 2014 DSX had vessel operating expenses of $6,289 per day. SB had vessel operating expenses of $4,477 per day (which include dry-dock costs, DSX account for dry-dock costs in a separate line)!

    On the other hand as you stated, SB is more leveraged than DSX.

    I like both companies a lot, I believe they are the best in breed. I hope to have a more comprehensive line by line comparison between the two in the near future.
    Jul 24, 2015. 03:55 PM | Likes Like |Link to Comment
  • A Few Thoughts On Greek Shipping And Taxes [View article]
    Shipping companies based in Greece have the option to use any flag they want (Greek, Marshall Islands, Liberia, etc.) BUT they still have to pay tonnage tax as if the ships carried the Greek flag.
    Jul 24, 2015. 09:46 AM | Likes Like |Link to Comment
  • Seeking Value In The Bulk Shipping Industry [View article]
    It should and I stand corrected!

    The article may argue for the "correct" way to seek value (companies where market cap is less than intrinsic value) but the opening paragraph was wrong.

    Thank you for your comment. With your permission I would like to edit my article.
    Jul 24, 2015. 09:37 AM | Likes Like |Link to Comment
  • Scorpio Tankers: $47 Million Total Return From Investment In Dorian LPG [View article]
    In last earnings call, management was asked about it and talked about stock-buyback or dividend.
    Jul 23, 2015. 11:54 AM | Likes Like |Link to Comment
  • Why Is Diana Shipping Issuing High-Yield Securities? [View article]
    Thank you for your kind words. G&A Expenses presented above include cash compensation to company executives, but exclude the value of any stock grants. Of course stock grants have a dilutive effect on common shareholders. Latest stock grant was in March 2015 for 1.1 million shares. The shares at the time were valued at $7.6 million.

    I hope this answers your question.
    Jul 23, 2015. 10:26 AM | 1 Like Like |Link to Comment
  • Analysis Of The Golden Ocean Group Sale And Lease-Back Deal With Ship Finance International [View article]
    This is an excellent source of data for average spot rates, and is updated daily!
    Please note today's $15,453 figure is based on the new cape 2014 index that was introduced by the Baltic Exchange well in 2014! The FFA industry still does most of paper trading based on the old cape index which was pegged today at $14,747. Not a big difference but I thought I should mention it.
    Jul 21, 2015. 05:14 PM | 1 Like Like |Link to Comment
  • Why Is Diana Shipping Issuing High-Yield Securities? [View article]
    DSX like all shipping companies based in Greece is subject to tonnage taxes. Tonnage tax is assessed on the size of each vessel owned/managed by DSX. Tonnage taxes are part of vessel operating expenses. Total Tonnage taxes for DSX for year 2014 were $2.1 million, or approximately $153 per day.

    The new memorandum agreement signed between Greece and the Eurozone calls for an increase in tonnage taxes for shipping companies. When this is implemented, vessel operating expenses will rise accordingly.

    Please note shipping companies based in Greece are not subject to corporate income taxes. For good order's sake the same applies to foreign shipping companies that are based in the US. Their shipping income is not subject to federal income taxes.
    Jul 21, 2015. 05:02 PM | Likes Like |Link to Comment
  • Now Scorpio Bulkers Drops A Signal Of An Impending Drybulk Rally [View article]

    Do not confuse the spot market with the rate for a 4-7 month term, especially for a modern capesize vessel delivered ex-yard.

    SALT has not provided any details as to when the vessel will be delivered from the yard and start her charter. Obviously the closer the delivery is towards Q4 the higher the rate charterers are willing to pay since Q4 has traditionally been very firm (Also witness the FFA curve for further proof).

    It is a good fixture for SALT, but I would not read too much into it.
    Jun 30, 2015. 03:16 PM | Likes Like |Link to Comment
  • Diana Shipping: Senior Notes Or Preferred Shares? [View article]
    DSXN & DSXPRB closed below par value today
    Jun 29, 2015. 07:39 PM | Likes Like |Link to Comment
  • Diana Shipping: Senior Notes Or Preferred Shares? [View article]
    SBLKL traded circa $17 back in December when the company had a massive funding gap in its new building program. Since then SBLK has raised about $425 million in two separate equity offerings in January and last May, and the funding gap has disappeared.

    SBLKL is now trading at a narrow discount to par ($23) to reflect its lower coupon rate vis-a-vis DSXN
    Jun 28, 2015. 01:13 PM | 2 Likes Like |Link to Comment
  • Diana Shipping: Senior Notes Or Preferred Shares? [View article]
    SBLKL is trading at a discount to par because its coupon is only 8%. Borrowing costs for dry-cargo shipping companies have been raised since then. For example DSXN had to pay 8.5%.

    DSXN is the safer play because it is better capitalized. On the other hand if you buy SBLKL and hold until maturity you will pocket an extra $2.

    If you are comfortable with interest/credit risk perhaps you could buy a little bit of both?
    Jun 28, 2015. 12:17 PM | Likes Like |Link to Comment
  • Safe Bulkers Preferred: Outsized Yield With Manageable Risk [View article]
    J, thank you for the article,

    As a holder of all Series of SB preferred shares I must caution all readers about the differences between the three series and risks involved.

    Series B (SBPRB) would most likely be called during the optional redemption period from July 2016 to July 2018. If SB does not redeem the shares by July 2018, it would have to pay a progressively higher coupon that will make it prohibitively expensive.

    Series C (SBPRC) & Series D (SBPRD) are true perpetual shares. They can by called after five years from their original issuance, but SB is under no obligation to redeem them, neither will it ever have to pay a higher coupon. If they are redeemed, it will be at the company’s sole option. Please do not assume they will be called at the earliest possible date.

    On the other hand all series are equal in seniority, i.e. they have the same liquidation preference.

    There are three risks with SB preferred shares that can the push their price below par. First is the interest rate risk. If interest rates rise, the fixed dividend on the preferred shares will be less attractive. Second it the risk that the company will defer dividends. It is true that dividends are cumulative, but the company may choose (to preserve liquidity), or may have to (to comply with debt covenants), to defer payments. Third, there is very little liquidity on all preferred shares (including SB), so investors must be prepared to buy and hold them indefinitely. There is no guarantee that preferred shares will revert to par value ($25) in the open market.

    Of the three risks above, the risk of dividend deferral is the hardest to judge. I remind you that the common dividend has been slashed to only a penny per share, and I expect that SB will have to cut it all together later this year if current market conditions persist. If that happens, preferred shareholders will lose the cushion of a common dividend payout that safeguards their preferred dividend.

    I too agree that SB is the best run publicly traded dry-cargo shipping company. Having said this, it is not immune from a downright depressing market particularly for panamax vessels.
    Jun 24, 2015. 10:21 AM | 2 Likes Like |Link to Comment
  • Diana Shipping: Senior Notes Or Preferred Shares? [View article]
    Could you provide a couple of examples or REIT's paying preferred dividends that are classified as ordinary income? I would like to investigate why.
    Jun 16, 2015. 02:49 PM | Likes Like |Link to Comment
  • Diana Shipping: Senior Notes Or Preferred Shares? [View article]
    I believe preferred dividends have to be paid out of a company's available (retained) earnings, which means that they are always treated as dividends for income tax purposes.

    However, many companies (particularly MLP's) make cash distributions that are in excess of available earnings. Any distributions over and above available earnings are then treated as return of capital, which reduce you basis in the stock as you correctly pointed out.

    The same is true for companies like NAT, that continued making cash distributions to shareholders even though the company was reporting losses. In that case 100% of the cash distribution was treated as return of capital.
    Jun 12, 2015. 07:00 PM | Likes Like |Link to Comment