Jefferies Maritime Group
Transcript of Jefferies Maritime Group
Jefferies LLC
Member SIPC
INVESTMENT BANKING
Jefferies Maritime Group
Maritime Market Update May 31, 2016
IN THIS ISSUE
Maritime Update Tanker Market Update Tanker Universe Equity Comparables Tanker FFA Curve Dry Cargo Market Update Drybulk Universe Equity Comparables Drybulk FFA Curve Gas Carrier Market Update Gas Carrier Universe Equity Comparables Shipping MLP Market Update Shipping MLP Universe Equity Comparables
Equity Market Conditions U.S. Equity Market Overview U.S. IPO Market Overview – Summary of Issuance U.S. Industrials IPO Market Overview U.S. Follow-on Market Overview
Debt Market Update Debt Market Overview Maritime Bonds
Maritime Market Update May 2016 /
Disclosure
Important Disclosures This communication is being provided strictly for informational purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security referenced herein. This material has been prepared by Jefferies LLC (“Jefferies”) a U.S.-registered broker-dealer, employing appropriate expertise, and in the belief that it is fair and not misleading. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified, therefore, we do not guarantee its accuracy. This is not an offer or solicitation of an offer to buy or sell any security or investment. Any opinion or estimates constitute our best judgment as of this date, and are subject to change without notice. Jefferies and Jefferies International Limited and their affiliates and their respective directors, officers and employees may buy or sell securities mentioned herein as agent or principal for their own account. This report was created by members of the investment banking division of Jefferies, and has not been reviewed by or discussed with, any member of Jefferies’ research department. This report is not intended to be, and in no way constitutes a “research report”, as such term is defined in Rule 137 promulgated under the Securities Act of 1933, as amended. Jefferies’ investment banking department has done, and may continue to do business with, companies included in this report. This report is a marketing communication and is not and should not be construed as investment research. Reproduction without written permission of Jefferies is expressly forbidden. Additional Information This material is approved for distribution in the United Kingdom by Jefferies International Limited, which is authorised and regulated by the Financial Services Authority ("FSA") and is located at Vintners Place, 68 Upper Thames Street, London EC4V 3BJ; telephone +44 (0) 20 7029 8000; facsimile +44 (0) 20 7029 8010. While we believe this information and materials upon which this information was based are accurate, except for any obligations under the rules of the FSA, we do not guarantee its accuracy. In the UK, this publication is directed solely at persons who have professional experience in matters relating to investments falling within Articles 19(5) and 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) or at persons to whom it can be otherwise lawfully distributed. For Canadian investors, this material is intended for use only by professional or institutional investors. None of the investments or investment services mentioned or described herein is available to other persons or to anyone in Canada who is not a "Designated Institution" as defined by the Securities Act (Ontario). For investors in the Republic of Singapore, this material is intended for use only by accredited, expert or institutional investors as defined by the Securities and Futures Act and is distributed by Jefferies Singapore Limited which is regulated by the Monetary Authority of Singapore. Any matters arising from, or in connection with, this document should be brought to the attention of Jefferies Singapore Limited at 80 Raffles Place #15-20, UOB Plaza 2, Singapore 048624, telephone: +65 6551 3950. Recipients of this document in any other jurisdiction should inform themselves about and observe any applicable legal requirements in relation to the receipt of this report. All logos, trademarks and service marks appearing herein are property of Jefferies. Member SIPC • © 01/2014 Jefferies LLC
i
Maritime Market Update May 2016 /
Table of Contents
Maritime Update 1
Equity Market Conditions 12
Debt Market Update 16
ii
Maritime Market Update May 2016 /
Maritime Update
1
Maritime Market Update May 2016 /
2.0% 0.9%
2.5% 6.5%
(2.1%) 6.5%
8.3% 7.4%
0.3% 5.2%
3.3% 5.5%
40%
50%
60%
70%
80%
90%
100%
110%
120%
5/28/15 7/27/15 9/26/15 11/26/15 1/26/16 3/27/16 5/27/16
Tanker Companies S&P 500
Regulatory Filings
No Filings
Recent Sector News
West Texas Intermediate crude prices increased 3.3% on the week from $47.75 per barrel to $49.33
Brent Crude prices increased 1.2% on the week from $48.72 per barrel to $49.32
Tanker Market Update Week of May 31, 2016
Source: Bloomberg, Capital IQ and SEC filings.
Recent News (May 23, 2016 – May 29, 2016)
Last Twelve Months Indexed Performance
Indexed to 100
Stock Price % of 52 LTM
5/27/2016 Week High Change Weekly Change (%)
Ardmore Shipping 9.35$ 62.0% (22.0%)
DHT Holdings 5.40 60.1% (32.3%)
Euronav 10.11 60.8% (19.9%)
Frontline 8.02 47.0% NA
Gener8 Maritime 6.87 46.4% NA
Navios Maritime Acquisition 1.80 40.0% (48.7%)
Nordic American Tankers 15.12 86.6% 16.4%
Scorpio Tankers 5.82 50.0% (36.9%)
Ship Finance International 15.70 88.2% 2.4%
Teekay Corporation 10.12 20.8% (77.9%)
Teekay Tankers 3.49 40.9% (49.0%)
Tsakos Energy Navigation 6.19 59.0% (35.9%)
Mean 55.1% (30.4%)
2
Maritime Market Update May 2016 /
Tanker Universe Equity Comparables ($Millions, except per share data)
Source: Forward calendar year estimates per Bloomberg.
a Stock Total TEV / EBITDA P / E Dist Cash Yield Dividend Yield Price / TEV /
Price % 52-Week Market Enterprise Adjusted Adjusted5/27/2016 High Cap Value NAV Asset Value
Ardmore Shipping Corporation 9.35$ 62.0% 244.6$ 613.5$ 8.1x 8.3x 8.2x 8.0x 29.5% 27.2% 7.6% 8.6% 78.7% 90.3%
DHT Holdings 5.40 60.1% 504.2 1,106.7 4.5x 5.4x 4.6x 7.6x 39.4% 34.5% 15.1% 10.7% 81.7% 90.7%
Euronav 10.11 60.8% 1,603.6 2,431.4 4.7x 6.1x 5.7x 9.5x 32.3% 25.5% 14.8% 10.0% 82.0% 87.4%
Frontline 8.02 47.0% 1,254.2 2,332.2 6.3x 6.1x 7.0x 8.9x 26.6% 27.6% 13.6% 11.5% 126.5% 112.7%
Gener8 Maritime 6.87 46.4% 568.0 1,632.0 4.8x 4.2x 2.7x 3.1x 57.6% 54.6% 0.0% 0.0% 46.1% 71.0%
Navios Maritime Acquisition 1.80 40.0% 272.5 1,394.6 6.8x 7.4x 3.5x 3.9x 49.7% 27.6% 11.1% 11.1% 62.2% 89.4%
Nordic American Tankers 15.12 86.6% 1,350.5 1,635.3 8.2x 9.9x 13.4x 22.1x 15.4% 14.5% 10.6% 8.8% 209.1% 175.7%
Scorpio Tankers 5.82 50.0% 1,007.1 2,883.3 8.4x 7.7x 7.9x 6.6x 25.5% 28.7% 8.7% 10.3% 95.6% 98.4%
Ship Finance International 15.70 88.2% 1,467.4 3,064.2 9.8x 9.4x 6.6x 7.1x 18.2% 21.5% 11.5% 11.5% NM NM
Teekay Corporation 10.12 20.8% 736.2 10,133.2 7.9x 7.7x 10.6x 12.6x 81.3% NA 2.2% 2.3% NM NM
Teekay Tankers 3.49 40.9% 544.7 1,563.8 4.8x 5.9x 2.8x 3.7x 52.4% 50.9% 13.8% 11.8% 81.7% 92.8%
Tsakos Energy Navigation 6.19 59.0% 540.6 1,842.9 6.3x 5.4x 4.7x 3.8x 41.9% 51.1% 5.2% 5.1% 77.7% 92.3%
Mean 6.7x 7.0x 6.5x 8.1x 39.2% 33.0% 9.5% 8.5% 94.1% 100.1%
2016E 2017E2016E 2017E 2016E 2017E 2016E 2017E
3
Maritime Market Update May 2016 /
Tanker FFA Curve
Source: Bloomberg.
VLCC TD3 FFA ($/Day)
Panamax LR1 TC5 FFA ($/Day)
Aframax TD7 FFA ($/Day)
Handymax MR TC2 FFA ($/Day)
(May 27, 2016)
$45,637 $40,801
$28,717
-
$10,000
$20,000
$30,000
$40,000
$50,000
Q2-16 2016 2017
$19,549
$14,874
$8,754
-
$5,000
$10,000
$15,000
$20,000
$25,000
Q2-16 2016 2017
$17,759
$15,256 $15,766
$10,000
$13,000
$16,000
$19,000
Q2-16 2016 2017
$7,463
$7,713
$7,476
$7,000
$7,250
$7,500
$7,750
$8,000
Q2-16 2016 2017
4
Maritime Market Update May 2016 /
-
20%
40%
60%
80%
100%
120%
5/27/15 7/27/15 9/26/15 11/26/15 1/26/16 3/27/16 5/27/16
Drybulk Companies Container Companies S&P 500
k Last Twelve Months Indexed Performance
Recent Sector News
No News
Dry Cargo Market Update
Regulatory Filings
5/24: Euroseas released Q1 2016 earnings
5/24: Golden Ocean released Q1 2016 earnings
5/25: Navios Maritime released Q1 2016 earnings
5/27: Seaspan announced a public offering of Class A common shares and subsequent redemption of Series C Preferred Shares
Source: Bloomberg, Capital IQ and SEC filings.
Indexed to 100
Recent News (May 23, 2016 – May 29, 2016)
Week of May 31, 2016
Last Twelve Months Indexed Performance
9.0% 0.5%
10.5% (19.6%)
20.2% (16.4%)
8.8% (3.9%)
46.0% (39.9%)
10.5% 6.4%
0.0% 0.4%
(0.9%)
(50.0%) 5.8%
(2.3%) (1.8%)
(6.5%) (10.8%)
Stock Price % of 52 LTM
5/27/2016 Week High Change Weekly Change (%)
DrybulkDiana Shipping 2.55$ 30.8% (60.8%)DryShips 2.19 11.4% (88.3%)Eagle Bulk 0.58 6.3% (94.1%)Euroseas 1.93 24.7% (73.2%)Genco Shipping & Trading 0.59 7.5% (91.7%)Globus Maritime 0.51 28.7% (95.6%)Golden Ocean Group 0.77 16.6% (81.6%)Goldenport 0.03 1.6% (43.5%)Navios Maritime Holdings 1.05 23.3% (69.0%)Paragon Shipping 0.92 2.0% (96.8%)Safe Bulkers 1.10 26.6% (67.2%)Scorpio Bulk 3.84 12.6% (86.8%)Seanergy Maritime 2.53 35.1% (27.2%)Star Bulk Carriers 0.76 22.3% (74.5%)Ultrapetrol 0.28 21.6% (77.9%)
Mean 18.1% (75.2%)
ContainerBox Ships 0.02$ 1.9% (99.8%)Costamare 9.52 46.6% (20.7%)Danaos 3.39 50.6% (47.5%)Diana Containerships 0.67 25.3% (95.6%)
Global Ship Lease 1.58 24.7% (72.1%)
Seaspan 14.95 71.6% (25.1%)
Mean 36.8% (60.2%)
5
Maritime Market Update May 2016 /
Drybulk Universe Equity Comparables ($Millions, except per share data)
Source: Forward calendar year estimates per Bloomberg.
Stock Total TEV / EBITDA P / E Dist Cash Yield Dividend Yield Price / TEV / Price % 52-Week Market Enterprise Adjusted Adjusted
5/27/2016 High Cap Value NAV Asset Value
DrybulkDiana Shipping 2.55$ 30.8% 204.1$ 727.6$ NA NA NM NM NM NM 0.0% NA 109.0% 102.4%
DryShips 2.19 11.4% 58.5 272.3 NM NM NM NM NM NM NA NA 22.7% 57.8%
Eagle Bulk 0.58 6.3% 227.4 463.9 NM NM NM NM NM NM 0.0% 0.0% 144.5% 117.8%
Euroseas 1.93 24.7% 15.8 91.8 13.5x 11.5x NM NM NM NM 0.0% 0.0% 73.1% 94.0%
Genco Shipping & Trading 0.59 7.5% 43.4 509.1 NA NA NM NM NM NM 0.0% 0.0% 17.0% 70.5%
Globus Maritime 0.51 28.7% 5.2 80.0 NM NM NM NM NM NM NA NA NM 136.3%
Golden Ocean 0.77 16.6% 407.3 1,149.8 NA NA NM NM NM NM 0.0% 0.0% 95.3% 98.3%
Goldenport 0.03 1.6% 0.3 106.8 13.3x 12.4x NM NM NM NM NA NA 8.5% 96.9%
Navios Maritime Holdings 1.05 23.3% 111.3 1,965.0 NM 22.9x NM NM NM 6.4% 0.0% 0.0% NM 123.2%
Paragon Shipping 0.92 2.0% 0.6 149.0 NM NM NM NM NM NM NA NA NM 174.5%
Safe Bulkers 1.10 26.6% 91.9 716.7 27.1x 16.3x NM NM 18.6% NM 0.0% 0.0% NM 115.5%
Scorpio Bulkers 3.84 12.6% 190.9 498.9 NA NA NM NM NM NM NA NA 43.6% 66.9%
Seanergy Maritime 2.53 35.1% 49.4 223.7 NM NM NM NM NM NM 0.0% 0.0% NM 167.6%
Star Bulk Carriers 0.76 22.3% 167.2 1,008.1 NA 19.8x NM NM NM 41.0% NA NA 66.4% 92.3%
Ultrapetrol 0.28 21.6% 39.5 441.4 NM NM NM 1.8x NM NM 0.0% 0.0% NM NM
Mean 18.0x 16.6x NM 1.8x 18.6% 23.7% 0.0% 0.0% 64.4% 108.1%
ContainerBox Ships 0.02$ 1.9% 0.6$ 133.3$ NA NA NM NM NM NM NA NA NM NMCostamare 9.52 46.6% 717.8 2,360.0 7.4x 7.8x 6.1x 6.3x 33.1% 32.8% 11.9% 12.0% NM NMDanaos 3.39 50.6% 372.2 2,977.0 7.8x 8.3x 2.2x 2.4x 65.5% 51.9% 0.0% 0.0% NM NM
Diana Containerships 0.67 25.3% 50.0 200.1 NM 27.2x NM NM 46.4% NM 1.5% 1.5% NM NM
Global Ship Lease 1.58 24.7% 86.8 864.2 7.7x NA NM NM 84.8% NM NA NA NM NM
Seaspan 14.95 71.6% 1,547.9 5,204.2 8.8x 8.6x 12.2x 12.5x 27.0% 30.8% 10.1% 10.0% NM NM
Mean 7.9x 13.0x 6.8x 7.1x 51.4% 38.5% 5.9% 5.9% NM NM
2016E 2017E2016E 2017E 2016E 2017E 2016E 2017E
6
Maritime Market Update May 2016 /
$5,583 $5,550
$6,675
-
$1,600
$3,200
$4,800
$6,400
$8,000
2016 2017 2018
$5,958 $5,825
$6,850
$4,000
$6,000
$8,000
2016 2017 2018
$5.72 $5.65
$6.00
$5.40
$5.50
$5.60
$5.70
$5.80
$5.90
$6.00
$6.10
2016 2017 2018
$7,900 $7,825
$9,200
$6,000
$8,000
$10,000
2016 2017 2018
Capesize 4TC FFA ($/Day) Capesize C7 FFA ($/Ton)
Panamax 4TC FFA ($/Day) Supramax 5TC FFA ($/Day)
Drybulk FFA Curve
Source: Bloomberg. Note: Last updated April 18, 2016. (1) Represents the average of forward quarters.
(1)
(1) (1)
(1)
7
Maritime Market Update May 2016 /
30%
40%
50%
60%
70%
80%
90%
100%
110%
5/27/15 7/27/15 9/26/15 11/26/15 1/26/16 3/27/16 5/27/16Gas Comps S&P 500
Last Twelve Months Indexed Performance
Recent Sector News
Henry Hub gas prices decreased 7.6% on the week from $1.96 per MMbtu to $1.81
North American spot LNG propane (Mt. Belvieu) prices decreased 4.4% on the week from $5.92 per MMBtu to $5.66
North American spot LNG Butane (Mt. Belvieu) prices increased 1.2% on the week from $6.70 per MMBtu to $6.78
North American spot LNG Ethane (Mt. Belvieu) prices decreased 1.9% on the week from $2.18 per MMBtu to $2.14
Total U.S. working gas in underground storage increased 2.7% on the week from 2,681 billion cubic feet to 2,754
Gas Carrier Market Update
Source: Bloomberg, Capital IQ, U.S. Energy Information Administration and SEC filings.
Indexed to 100
Recent News (May 23, 2016 – May 29, 2016)
Week of May 31, 2016
Regulatory Filings
No Filings
1.1% 4.8%
1.4% (3.8%)
3.5%
xc Stock Price % of 52 LTM
5/27/2016 Week High Change Weekly Change (%)
Dorian LPG 8.82$ 50.1% (38.2%)
GasLog 12.12 57.4% (40.6%)
Golar LNG 17.59 33.9% (64.8%)
Navigator Holdings 13.90 68.4% (28.5%)
Stealthgas 4.96 69.9% (27.3%)
Mean 55.9% (39.9%)
8
Maritime Market Update May 2016 /
Gas Carrier Universe Equity Comparables ($Millions, except per share data)
Source: Forward calendar year estimates per Bloomberg.
Stock Total TEV / EBITDA P / E Dist Cash Yield Dividend YieldPrice % 52-Week Market Enterprise
5/27/2016 High Cap Value
Dorian LPG 8.82$ 50.1% 504.7$ 1,247.0$ 6.0x 5.8x 3.6x 3.5x 36.3% 34.8% 0.0% 0.0%
GasLog 12.12 57.4% 975.6 3,797.5 13.0x 10.3x NM 18.9x 15.6% 21.5% 4.7% 4.7%
Golar LNG 17.59 33.9% 1,639.4 3,029.1 NM 17.2x NM NM NM 7.9% 1.1% 1.4%
Navigator Holdings 13.90 68.4% 770.4 1,329.1 12.0x 8.2x 8.4x 7.6x 19.9% 22.7% NA NA
Stealthgas 4.96 69.9% 201.1 504.6 7.2x 6.8x 14.9x 14.2x 30.4% NA NA NA
Mean 9.6x 9.6x 8.9x 11.0x 25.6% 21.7% 1.9% 2.0%
2016E 2017E2016E 2017E 2016E 2017E 2016E 2017E
9
Maritime Market Update May 2016 /
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
5/28/15 7/27/15 9/26/15 11/26/15 1/26/16 3/27/16 5/27/16
S&P 500 MLP Comps
Shipping MLP Market Update
Regulatory Filings
No Filings
Source: Bloomberg, Capital IQ and SEC filings.
Indexed to 100
Recent News (May 23, 2016 – May 29, 2016)
Last Twelve Months Indexed Performance
Week of May 31, 2016
5.7% 1.3%
4.7% (2.4%)
1.3% 0.9%
3.0% 3.0%
(0.8%) (1.4%)
Stock Price % of 52 LTM
5/27/2016 Week High Change Weekly Change (%)
Capital Product Partners 2.78$ 30.1% (69.4%)
Dynagas LNG Partners LP 14.08 71.5% (27.2%)
GasLog Partners 19.80 76.8% (22.8%)
Golar LNG Partners 16.88 58.5% (38.6%)
Höegh LNG Partners LP 17.72 75.5% (20.5%)
KNOT Offshore Partners 18.53 77.6% (22.0%)
Navios Maritime Midstream 11.85 66.2% (33.1%)
Navios Maritime Partners 1.38 11.5% (87.2%)
Teekay LNG Partners 14.07 39.8% (60.3%)
Teekay Offshore Partners 6.15 27.4% (73.0%)
Mean 53.5% (45.4%)
10
Maritime Market Update May 2016 /
Shipping MLP Universe Equity Comparables ($Millions, except per share data)
Source: Forward calendar year estimates per Bloomberg.
Stock Total TEV / EBITDA P / E Dist Cash Yield Dividend YieldPrice % 52-Week Market Enterprise
5/27/2016 High Cap Value
Capital Product Partners 2.78$ 30.1% 332.6$ 984.5$ 6.5x 6.3x 6.7x 6.7x 38.7% 39.9% 10.8% 10.8%
Dynagas LNG Partners LP 14.08 71.5% 500.2 1,252.2 9.5x 10.5x 7.7x 9.3x 19.4% 17.7% 12.3% 12.3%
GasLog Partners 19.80 76.8% 639.4 1,310.9 9.1x 8.3x 9.1x 8.9x 21.2% 20.7% 9.7% 9.8%
Golar LNG Partners 16.88 58.5% 1,060.6 2,417.9 6.4x 6.0x 6.3x 5.8x 30.2% 31.7% 13.7% 13.7%
Höegh LNG Partners LP 17.72 75.5% 466.3 854.0 11.1x 7.4x 9.5x 8.4x 11.0% 13.0% 9.5% 10.0%
KNOT Offshore Partners 18.53 77.6% 514.3 1,159.4 8.7x 8.3x 10.1x 9.9x 18.7% 19.9% 11.2% 11.3%
Navios Martime Partners 1.38 11.5% 117.0 665.2 5.6x 5.6x 9.2x 7.5x 83.8% 85.5% NA NA
Navios Maritime Midstream 11.85 66.2% 245.2 404.8 6.0x 5.8x 8.0x 7.9x 22.5% 21.6% 14.3% 14.5%
Teekay LNG Partners 14.07 39.8% 1,119.6 3,154.8 9.8x 8.8x 6.6x 5.5x 24.9% 28.0% 4.0% 4.0%
Teekay Offshore Partners 6.15 27.4% 658.8 4,196.7 6.5x 5.7x 4.2x 3.1x 67.5% 78.5% 7.2% 7.1%
Mean 7.9x 7.3x 7.8x 7.3x 33.8% 35.7% 10.3% 10.4%
2016E 2017E2016E 2017E 2016E 2017E 2016E 2017E
11
Maritime Market Update May 2016 /
Equity Market Conditions
12
Maritime Market Update May 2016 /
Equity Market Backdrop
Markets Bouncing Off February Bottoms
Global Equity Returns – 2016 YTD
Source: CapIQ.
Volatility Measurements
(20%)
(12%)
(5%)
(4%)
(1%)
0%
1%
3%
3%
13%
(30%) (15%) 0% 15% 30%
Shanghai
Nikkei
EURO STOXX
DAX
NASDAQ
FTSE
RUSSELL 2000
Dow Jones
S&P 500
Brazil Bovespa
Source: CapIQ.
Key Points
Markets have stabilized after a volatile start to 2016
─ First quarter since Q4 1933 the S&P 500 finished up after trading down >10%
─ S&P 500 was up on average two out of every three days in March and April
Since February 11th bottom:
─ S&P 500: +14.8%
─ Russell 2000: +15.9%
─ NASDAQ: +15.6%
─ Volatility (VIX): (53.4)%
U.S. Sector Returns – 2016 YTD
(13%)
0%
0%
2%
2%
4%
5%
7%
8%
(30%)(20%)(10%) 0% 10%
Healthcare
FIG
Technology
Consumer
Media
Real Estate
Telecom
Energy
Industrials
Equity Returns By Mkt. Cap. – 2016 YTD
(5%)
5%
6%
5%
(30%)(20%)(10%) 0% 10%
<$1 billion
$1 billion -$5 billion
$5 billion -$10 billion
>$10 billion
Source: CapIQ. Source: CapIQ.
U.S. Fund Flows
CBOE VIX
S&P 500 Intraday Movements
Source: CapIQ. Bloomberg.
0bps100bps200bps300bps400bps500bps600bps
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M
10.0
20.0
30.0
40.0
50.0
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M
VIX
Inde
x Va
lue
Current VIX: 13.1
Avg. May Move: 88 bps
Fund Flows
Sector Fund Flows 5/25/16
(15,000)
(5,000)
5,000
15,000
1/6
1/1
31
/20
1/2
72
/32
/10
2/1
72
/24
3/2
3/9
3/1
63
/23
3/3
04
/64
/13
4/2
04
/27
5/4
5/1
15
/18
5/2
5
(1,000)(500)
0500
1,000
13
Maritime Market Update May 2016 /
U.S. IPO Market Overview Key Points
Increased volatility has negatively impacted the U.S. IPO market to start 2016
26 U.S. IPOs have priced raising $5.6bn in proceeds in 2016
─ 13 out of 26 have been Healthcare transactions with pre-launch indications of interest from insiders or anchor orders
─ 17 out of 26 priced within the filing range
13 U.S. IPOs have been withdrawn after launching formal IPO roadshows
─ Decision to postpone largely attributed to books building below IPO filing range
─ Only six out of sixteen IPOs ≤$75 million has priced
Despite volatility new public IPO filings have continued at a similar pace and issuers are keeping S-1/F-1 filings current
Source: Dealogic. Excludes closed end funds, financings/acquisitions, capital pool companies, SPACs and deals under $20 million. (1) Withdrawn / Postponed data reflects only marketed deals.
Recent U.S. IPO Activity (1)
U.S. Market Activity Comparison – Year to Date
4.8%
16.4%
3.3% 3.0% 2.7%
2012 2013 2014 2015 2016
U.S. IPO Activity Comparison – Year to Date
16
3 6
15 13
2012 2013 2014 2015 2016
67 82
156
83 31
2012 2013 2014 2015 2016
S&P 500 Performance Avg. CBOE VIX Index Avg. S&P 500 Intraday Move
U.S. IPOs Priced U.S. IPOs Withdrawn After Marketing U.S. IPO Filings
1.0% 0.9% 0.9% 1.0% 1.3%
2012 2013 2014 2015 2016
68 71 114
62 26
2012 2013 2014 2015 2016
18.6 13.6 14.3 15.4 18.1
2012 2013 2014 2015 2016
Price/With Deal Mkt % of % Pricing v. Offer-to-
Date Issuer Value ($m) Cap ($m) Mkt Cap Sec. Range Sector 1-Day Current
05/25/16 Cotiviti Holdings Inc 237.5 1,704.9 13.9% - In Range TMT (10.0%) (6.1%)
05/25/16 GMS Inc 147.0 837.8 17.5% - In Range Industrials 4.3% 7.1%
05/25/16 Reata Pharmaceuticals Inc 69.6 236.5 29.4% - Below Healthcare 18.8% 29.8%
05/25/16 US Foods Holding Corp 1,022.2 4,913.5 20.8% - In Range Consumer 8.3% 8.8%
05/23/16 Midland States Bancorp Inc 80.1 326.7 24.5% 16.3% Below Finance (0.5%) 1.9%
05/18/16 Grupo Supervielle SA 322.6 758.2 42.5% 25.0% In Range Finance 4.6% 3.8%
05/18/16 Merus BV 61.4 154.1 39.9% - Below Healthcare 0.4% (23.8%)
05/17/16 Pulse Biosciences Inc 20.0 50.3 39.8% - In Range Healthcare 4.3% 7.8%
05/12/16 Acacia Communications Inc 119.0 820.1 14.5% - In Range TMT 34.6% 65.2%
05/12/16 Oncobiologics Inc 35.0 125.9 27.8% - Below Healthcare (20.0%) (12.5%)
05/11/16 SiteOne Landscape Supply Inc 241.5 830.4 29.1% 100.0% In Range Industrials 27.0% 33.0%
05/11/16 Turning Point Brands Inc 54.0 159.6 33.8% - Below Consumer 1.2% 7.2%
05/11/16 Viamet Pharmaceuticals Inc 85.5 389.4 22.0% - Withdrawn Healthcare - -
05/05/16 Intellia Therapeutics Inc 124.2 631.7 19.7% - In Range Healthcare 22.8% 63.9%
04/26/16 Red Rock Resorts Inc 579.3 2,259.2 25.6% 0.7% In Range Consumer (4.1%) 3.1%
04/26/16 Yintech Investment Holdings Ltd 101.3 786.3 12.9% - In Range Finance 0.0% (7.6%)
04/21/16 SecureWorks Corp 112.0 1,129.4 9.9% - Below TMT 0.0% (1.9%)
04/20/16 American Renal Associates Holdings Inc 189.8 653.8 29.0% - In Range Healthcare 20.5% 23.6%
04/19/16 MGM Growth Properties LLC 1,207.5 4,369.5 27.6% - In Range Real Estate 4.8% 9.7%
04/15/16 BioCardia Inc 50.0 145.7 34.3% - Withdrawn Healthcare - -
20 Deals Mean: $243.0 $1,064.1 25.7% 35.5% A/I: 66.7% 6.5% 11.8%
Median: $115.5 $706.0 26.6% 20.7% W: 10.0% 4.3% 7.2%
14
Maritime Market Update May 2016 /
U.S. Follow-on Market Overview
Issuance by Sector
Source: Dealogic. Excludes transactions less than $20.0 million.
Marketing Type Key Points
More diverse, balanced equity issuance trends in 2016 as the Energy and Real Estate sectors have joined the Healthcare sector as leaders in the follow-on market
By number of deals, stated use of proceeds has been balanced to start the year, however acquisition financing has accounted for 19% of dollars raised
File-to-offer discounts widened amid volatility but have begun to normalize
Use of Proceeds
28%
48%
63%
47%
9%
5%
0% 50% 100%
2015
2016
Block Accelerated Marketed
Primary Follow-on File-to-Offer Discounts
Secondary Follow-on File-to-Offer Discounts
Primary Block All-in-Discounts
Secondary Block All-in-Discounts
(5.9%) (5.2%)
(13.3%) (10.0%) (8.6%)
nm
(5.4%) (4.3%) (7.3%)
(9.7%)
2015 2016 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16
(7.4%) (10.3%)
(6.9%) (9.0%)
(6.0%)
(14.6%) (10.9%)
(6.6%) (9.1%) (9.5%)
2015 2016 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16
(5.9%) (7.5%) (7.0%) (5.3%)
nm
(7.3%) (9.1%)
(6.9%) (6.0%) (8.0%)
2015 2016 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16
(3.8%) (4.9%) (3.5%) (3.3%) (3.2%) (3.2%) (2.1%)
(6.3%) (3.9%) (3.4%)
2015 2016 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16
46
11
88
48
60
9
207
37
50 73
36
80
12
0% 50% 100%
2015
2016
Consumer Energy Finance Healthcare
Industrials Real Estate TMT
85
22
171
45
3 64
30
29
10
52
10
61
12
139
48
0% 50% 100%
2015
2016
Acquisitions Secondary Buyback
Repay Debt CAPEX Working Capital
R&D General
2016 YTD: 178 Deals / $65.4bn
2015 YTD: 341 Deals / $109.1bn
FY 2015: 617 Deals / $188.9bn
15
Maritime Market Update May 2016 /
Debt Market Update
16
Maritime Market Update May 2016 /
Debt Market Overview
Source: Standard & Poor’s LCD, Jefferies Leveraged Finance Group.
New Bank Loan Syndications – Last Twelve Months High Yield Debt Issuance – Last Twelve Weeks
High Yield Mutual Fund Flows – Last Twelve Weeks
$47.2
$62.3
$23.6
$30.3 $31.1 $27.1
$10.5
$35.8
$18.7
$30.3 $31.8
$42.2
-
10
20
30
40
50
60
70
80
-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
Num
ber of Deals
$Bill
ions
Bank Deals Bank Deals
$3,225 $2,575
$5,750
$8,245
$10,940
$3,350
$9,275
$6,250
$3,765
$6,875 $6,650
$11,205
-
5
10
15
20
25
-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Num
ber of Deals
$Mill
ions
Weekly Issuance
$1,796 $1,700
$2,156
($545)
$1,200
$85 $410 $296
($1,807) ($1,900)
$1,100
($562)
($2,500)
($2,000)
($1,500)
($1,000)
($500)
-
$500
$1,000
$1,500
$2,000
$2,500
$M
illio
ns
17
Maritime Market Update May 2016 /
Debt Market Overview
Source: Standard & Poor’s LCD, Jefferies Leveraged Finance Group.
Market Metrics
Market Metrics: Pull This Week and Last Week from Bloomberg (US0003M, CT5 Govt, CT30 Govt, Prime)
Pull One Year Ago from Leveraged Finance Weekly (or all if available)
Bank Loan Secondary Spreads – Last Twelve Months High Yield Broad Market Index – Last Twelve Months
This Week Last Week One Year Ago
3 Month LIBOR 0.69% 0.65% 0.28%Prime 3.50% 3.50% 3.25%5 year Treasuries 1.38% 1.38% 1.52%30 year Treasuries 2.65% 2.64% 2.89%
-
L + 250
L + 500
L + 750
L + 1,000
Spr
ead
All BB/B BB B
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
11.00%
5/15 7/15 8/15 10/15 11/15 1/16 3/16 4/16
YTW
B BB
18
Maritime Market Update May 2016 /
Maritime Bonds
Source: CapitalIQ and Bloomberg.
NotesPrice YTW STW Maturity Ratings Outstanding ($mm)
CMA CGM8.750% Sr Nts due '18 90.000 13.53% 13.45% 12/15/2018 Caa1 / B- 300€ 7.750% Sr Nts due '21 75.000 15.52% 15.45% 1/15/2021 Caa1 / B- 550€
Eletson Holdings Inc.9.625% Secured due '22 78.750 15.40% 14.06% 1/15/2022 B3 / B 300$
Global Ship Lease10% Sr Notes due '19 87.500 15.61% 14.53% 4/1/2019 B3 / B 420$
Great Lakes Dredge & Dock7.375% Sr Sub Nts due '19 94.750 9.65% 8.46% 2/1/2019 Caa1 / B 275$
Gulfmark Offshore6.375% Sr Nts due '22 48.000 23.10% 0.00% 3/15/2022 B1 / BB- -$
Hapag-Lloyd9.75% Sr Nts due '17 101.460 5.64% 4.61% 10/15/2017 Caa1 / B- 125$
Hornbeck Offshore Services5.875% Sr Nts due '20 61.000 21.25% 20.10% 4/1/2020 Ba3 / BB- 375$ 5% Sr Nts due '21 56.500 19.43% 17.42% 3/1/2021 Ba3 / BB- 450$
Navios Maritime Acquisition8.125% Sr Nts due '21 81.750 12.88% 11.43% 11/15/2021 B3 / B+ 670$
Navios Maritime Holdings8.125% Sr Nts due '19 36.625 56.41% 54.77% 2/15/2019 Caa1 / B+ 350$ 7.375% Sr Sec Nts due '22 41.750 28.94% 27.11% 1/15/2022 B1 / BB- 650$
Navios South American Logistics7.25% Sr Nts due '22 62.750 17.64% 16.31% 5/1/2022 B2 / B+ 375$
Overseas Shipholding Group8.125% Sr Nts due '18 100.000 8.11% 7.26% 3/30/2018 Caa1 / BB- 119$
Royal Caribbean Lines5.25% Sr Nts due '22 104.750 4.40% 0.00% 11/15/2022 Ba1 / BB -$
Stena International5.75% Sr Sec Nts due '24 85.000 8.42% 6.55% 3/1/2024 Ba2 / BB+ 350$
Teekay Corporation8.5% Sr Nts due '20 80.000 15.98% 14.34% 1/15/2020 B2 / B+ 393$
Ultrapetrol Limited8.875% Sr Sec due '21 18.000 80.66% 65.37% 6/15/2021 B3 / B 225$
Windsor Petroleum Transport (FRO)7.84% Secured due '21 82.000 12.86% 14.35% 1/15/2021 – / – 155$
19
Maritime Market Update May 2016 /
Maritime Retail / Preferred Securities
Source: Bloomberg.
Amount Yield at Strip Yield Delta Since Dirty Price
Issue Date Issuer ($M) Offer 27-May Offer 27-May % of Par
Retail Bonds
05/20/15 Diana Shipping $55.0 8.500% 10.380% 1.880% $20.50 82.000%09/11/14 Scorpio Bulkers 65.0 7.500% 10.623% 3.123% 17.50 70.000%10/28/14 Scorpio Tankers 51.8 7.500% 7.544% 0.044% 25.15 100.600%05/07/14 Scorpio Tankers 50.0 6.750% 7.382% 0.632% 22.80 91.200%03/27/14 Seaspan 345.0 6.375% 6.376% 0.001% 25.40 101.600%10/30/14 Star Bulk Carriers 50.0 8.000% 13.649% 5.649% 14.85 59.400%
Preferred
07/26/13 Box Ships $14.0 9.000% 12.439% 3.447% $3.00 12.000%
05/06/15 Costamare 100.0 8.750% 11.042% 2.292% 20.33 81.320%
01/13/14 Costamare 100.0 8.500% 10.752% 2.252% 20.00 80.000%
07/30/13 Costamare 50.0 7.625% 9.750% 2.125% 20.01 80.048%
02/10/14 Diana Shipping 65.0 8.875% 15.091% 6.216% 15.11 60.428%
07/13/15 Dynagas LNG Partners 75.0 9.000% 10.054% 1.054% 22.99 91.960%
03/30/15 GasLog 115.0 8.750% 9.432% 0.682% 23.55 94.219%
08/13/14 Global Ship Lease 35.0 8.750% 16.919% 8.169% 13.74 54.960%
07/25/13 International Shipholding Corp 31.6 9.000% 9.240% 0.240% 22.15 22.150%
02/14/13 International Shipholding Corp 25.0 9.500% 43.684% 34.184% 22.50 22.500%
06/30/14 Navios Maritime Holdings 120.0 8.625% 60.323% 51.698% 4.06 16.240%
01/21/14 Navios Maritime Holdings 50.0 8.750% 53.222% 44.472% 4.80 19.200%06/23/14 Safe Bulkers 80.0 8.000% 9.956% 1.956% 11.74 46.960%04/30/14 Safe Bulkers 57.5 8.000% 16.129% 8.129% 12.60 50.400%06/06/13 Safe Bulkers 40.0 8.000% 9.390% 1.390% 21.50 86.000%2/6/2014 Seaspan 135.0 8.250% 8.208% (0.042%) 25.37 101.480%12/06/12 Seaspan 127.6 7.950% 7.935% (0.015%) 25.19 100.760%12/06/12 Seaspan 127.6 7.950% 7.935% (0.015%) 25.19 100.760%01/21/11 Seaspan 350.0 9.500% 9.473% (0.027%) 25.29 101.160%04/13/15 Teekay Offshore Partners 125.0 8.500% 10.698% 2.198% 20.00 80.000%04/23/13 Teekay Offshore Partners 150.0 7.250% 9.675% 2.425% 18.71 74.840%04/22/15 Tsakos Energy Navigation 85.0 8.750% 9.664% 0.914% 22.70 90.800%09/26/13 Tsakos Energy Navigation 50.0 8.875% 8.939% 0.064% 25.05 100.200%05/02/13 Tsakos Energy Navigation 50.0 8.000% 8.169% 0.169% 24.95 99.800%
20