A corporate bond issued by Rickmers Holding is trading on the Frankfurt Stock Exchange after raising 175 million euros ($231 million) for the Hamburg-based shipping company.
The first-ever bond issued by a German charter ship owner fell short of the original 200 million euros ($264 million) target, but the company said it was a success.
The bond, which has a maturity of five years, has a coupon of 8.875 percent.
“With this first step, we have achieved our objective of bringing Rickmers Holding to the capital market, successfully tapping a new source of funding,” Rickmers Group CEO Ron Widdows said.
“This bond issue has also brought us into a whole new set of relationships with many in the investment community that will be beneficial as we build and expand our business.”
The Rickmers issue is one of the largest small and medium-sized bonds to date in Germany and will transform the group “into a capital market oriented company,” said Ignace Van Meenen, chief financial officer.
The net proceeds from the bond will be used to finance growth and investments as well as to refinance bank liabilities.
Rickmers turned to the bond market following the demise of the KG limited partnerships, the traditional funding source for German shipowners that has dramatically shrunk following the deep slump in the container and bulk shipping charter markets.
In December, Rickmers formed a pioneering partnership with U.S.-based Oaktree Capital Management to order eight “eco” container ships with an option for a further eight sister vessels.