Tim McPartland

Digging into Shipping

A couple of random items here. Time charters are not worth much if the company that has chartered the vessels has gone bankrupt--and a number of them have already. And secondly most of the covenants of the loans on these ships have a provision that would put companies in dafault if their asset value falls below a certain percentage of carrying value--meaning they would need to put up more money to stay out of default. Anecdotal evidence is that ships are now selling at 55% of book