Maersk may drop 2011 bond sale
AP Moeller-Maersk, the world’s biggest container shipping line, said it may abandon planned bond sales this year as investor demand dwindles amid a bleaker global recovery outlook, Bloomberg reports. “2011 has been more challenging,” Jan Bjorn Kjaervik, Maersk’s head of finance, said by phone. “The appetite among investors has been much slower.”
Maersk, which issued bonds for the first time in 2009, had planned to sell the securities on an annual basis to provide investors with papers of varying maturities. The Copenhagen- based company last sold debt in November, when it raised 500 million ($678 million) from issuing seven-year bonds. Maersk wants to diversify its funding, Kjaervik said.
“We are not in any immediate need of any refinancing or funding, so we are waiting for the right opportunity,” Kjaervik said. “If we see an opportunity, we probably will do an issuance, but it depends on investor appetite and maturity, profile and price.”
Credit spreads are 80 basis points to 90 basis points higher than they were earlier this year, Kjaervik said in the October 7 interview. When Maersk first went to the debt market, in 2009, the cost of funds was roughly the same as bank loans. Bonds were a cheaper source of financing than bank loans in 2010 before rising in price this year, he said.
Maersk Oil, which contributed more than any other unit to group profit in four of the last five years, plans to spend about $1 billion a year on exploration and will consider acquisitions in countries where it already has operations, Chief Executive Officer Jakob Thomasen said.
“We would very much like to do something, follow up on what we have said to the market in terms of being there,” Kjaervik said. “But on the other hand, we can’t do that unless it makes sense for us.”
Maersk, which issued bonds for the first time in 2009, had planned to sell the securities on an annual basis to provide investors with papers of varying maturities. The Copenhagen- based company last sold debt in November, when it raised 500 million ($678 million) from issuing seven-year bonds. Maersk wants to diversify its funding, Kjaervik said.
“We are not in any immediate need of any refinancing or funding, so we are waiting for the right opportunity,” Kjaervik said. “If we see an opportunity, we probably will do an issuance, but it depends on investor appetite and maturity, profile and price.”
Credit spreads are 80 basis points to 90 basis points higher than they were earlier this year, Kjaervik said in the October 7 interview. When Maersk first went to the debt market, in 2009, the cost of funds was roughly the same as bank loans. Bonds were a cheaper source of financing than bank loans in 2010 before rising in price this year, he said.
Maersk Oil, which contributed more than any other unit to group profit in four of the last five years, plans to spend about $1 billion a year on exploration and will consider acquisitions in countries where it already has operations, Chief Executive Officer Jakob Thomasen said.
“We would very much like to do something, follow up on what we have said to the market in terms of being there,” Kjaervik said. “But on the other hand, we can’t do that unless it makes sense for us.”