***DRYS Thread***

the bdi was hammered down worse then and its not a theory if it actually took place is it ??

25 million shares were sold out then.

$500,000,000 worth of shares even if were sold out @ an average price of $10 would be 50 million. @ $7 would be 70 million. 5/ 100 million.

the real O/S right now before this was about 70-75million at best it looks like it would double from here.

You gotta give it to GE here. He gets a greek bank to ammend a loan for 200 million that wasnt even an issue and the market re-acts like the bdi jumped up 2000 pts. now he can sell into this and cause less dilution.

rest of the day should be very interesting.

I really dont think those shares are going to be sold..I could be completely wrong but I just dont think he would sell shares down here unless someone forced a gun to his head. The company has 300M plus in cash, so him selling shares would be from force more than him needing to.

The deal is that this shows banks dont want to force loan covenants and I HOPE that the other banks follow suit which they should..

It would be brutal for MANY businesses, more than just shipping if banks start forcing default because of the short term issues in the shipping market.

Of course. this story today is a gimmick. the real story with drys is dilution 500,000,000 worth. GE's move today was simply to boost the stock price so he could dilute DRYS less. higher stock price = less shares he needs to sell to get the $500 million.

pireaus bank (greek bank) was never even mentioned in the loan covenant breach last week it was nordea and deutshe banks with 1.2 billion of drys debt tied to ocean rigs. nordea is in bad shape is probably why he was forced to raise $500 million. i dont see what other reason he would sell 500m worth of shares for.

oops that should say dexia not nordea.

my point exactly he is being forced by dexia . the deal with pireaus is for appearances like you said to prop up the stock price. the real issue here is the new shares. I dont believe for 1 second drys would go bankrupt but they are diluting as we speak. once the dilution stops then drys will have more o/s and i think will be a more stable stock, since their will be more long holders.

WLD,

I dont think that is true, and the net debt at issue is like 1B, so you are saying that ONE bank who holds a PORTION of the debt is calling it all in? I dont accept that and it makes no sense unless they are going under, then it wouldnt have anything to do with the loan payment schedule, rather that they need the money (the bank).

I dont know which banks own which debt, I could find out of course but I think DB is the largest bank, and the issue anyway is LTV, so since there are I think three other banks that DRYS has a credit line with, I dont see how ONE bank can force 500M and say it is due to LTV issues..

Doesnt make sense to me.

he ability of DRYS to successfully renegotiate its debt relies in great part on the ability of the underwriter to continue to carry that debt. There’s been a lot of speculation over DRYS’ debt-holders, but I haven’t seen any mention around here of one of the largest holders, Dexia Credit Local New York Branch.

On January 28, 2009 Dryships reported in an SEC filing, “Two of our leading banks, which collectively held $751.8 million of our indebtedness as of December 31, 2008, have notified us that we are in breach of certain financial covenants contained in our loan agreements, and we have been in communication with another lender that currently holds $650 million of our outstanding indebtedness regarding breach of loan covenants. Currently, we are in discussions with these and other lenders for waivers and amendment of certain financial and other covenants contained in our loan agreements.” See: https://idea.sec.gov/Archives/edgar/data/...

On July 21, 2008 DRYS announced the closing of the senior secured credit facility of US$1,125 Million and that the debt facility had been jointly arranged by Deutsche Bank AG - Global Principal Finance, London and Dexia Crédit Local New York Branch. This debt facility was arranged to finance DRYS’ purchase of two ultra-deepwater drill ships (a/k/a “Hulls 1865 and 1866”) under construction by Samsung Heavy Industries. The cost of EACH of the drill vessels, scheduled for delivery in 3Q 2011, was $800 million for a total of $1.6 Billion. Deutsche Bank and Dexia Credit Local New York Branch each financed $562.5 million of the $1.125 Million debt facility.

Dexia Credit Local New York Branch has been under severe pressure and was downgraded (again) by Moody’s on January 20th after having been downgraded last Fall. https://anotherfp.com/newsite/story.php?i...
Your eyes might glaze over in undertaking research on Dexia, it’s Luxembourg, Belgian and other banking interests, its bond insurance service, etc., the government rescues of the co, etc. so be patient.

One other point: how come DRYS never published how many points or percentage of a point over LIBOR it is paying? “A margin over LIBOR” -- which is all the company has reported -- is not very transparent.

Deutsche Bank and Dexia Credit Local New York Branch each financed $562.5 million of the $1.125 Million debt facility.

So what is going on in simple terms?  I am confused.....do we continue to hold this stock long term now I guess?  Do we buy more?  I don't understand what they are having to do.

 Depends on your price entry. Never ever ever add to a losing position.

Old news, but worth a look...

1/21/09 The level of idle containerships has risen to 255 -- 5.5% of the global fleet, a historic high.

Vermeer,

While that is true, prices have dropped below that fact..meaning pricing is so low that it infers a higher idle rate than 5.5%, that is also container ships which are not part of most of these companies.

WLD, those two are the Cardiff rigs if I am not mistaken, since the other two were acquired before July, AND the ammt due on the first two is about 600M with none due until 2010.

I am still not sold on this 500M being required by lenders immediately, that would mean the LTV dropped to 50-60% which hasnt happened.

Wall
i think you know that LTV on ships has dropped 50%. why would everyone be backing out of newbuilds that they can ??
those rigs are drys,  not cardiff debt.


I'm really pissed off about the 500m sharSubmite being sold. I was planning on buying into DRYS big last week. I had a feeling chinese new year holidays would build up demand and i think we have seen that demand in the bdi today. 

WLD,

Read the edgar filings lately, in them George says we have paid about 450M towards the two rigs already, and the balance due at the time was like 600M, and the original purchase of the two were actually in 2007 via the options he purchased on them pre-Primelead acquisition.

There isnt much newbuild that George has coming in, most of the debt was on already owned vessels and the Primelead debt which came with the entity.

Having a bank demand 500M on even 1B in loans is absurd, it would be like saying he purchased assets in 2007 and 2008 with NO money down, hasnt made any payments and now the bank wants 40-50% equity to hold the loan, it just doesnt ring true to me.

I would be shocked if any were sold and that the equity line was put in place to either deal with the Cardiff two rigs OR to show the banks it is there, not that they were demanding it this week.

BDI really jumped today and FFA's going nuts.  Lets hope this continues.

Wallstreet -

If GE wasn't selling the shares now why wouldn't he just come out and say so?

I don't know what to think.  I do know the I like seeing the BDI rebound.

Any idea when DRYS conference call to go over year-end earnings is? 

I expect George will call it like it is and try to be diplomatic and reasonable with expectations. It should be interesting.

He had an open account for most of last year and I dont think he will sell on the bottom here unless he is FORCED, which I dont think he is.

well...i'm hanging on and hoping for the best

Just follow the BDI closely.  The more it recovers the better off we are

 Guys:

  Is there any real reason to expect world trade to rebound? Truly?

 This is a world wide, and extremely deep recession, and trade has fallen off a cliff. I do look at the BDI, and while it has showed signs of life, there is nothing that I have seen that would indicate anything remotely close to recovery.

  Europe is in worse shape than we are, and that is something to really make one pause. I simply do not see any combination of events that would restart the world trade to levels seen before summer of 2008.

yeah todays action sucked period, the BDI has been on a NICE run, Cape rates getting closer to a reasonable level, the odd thing is how PANA rates are so tight to the Supra and behind Capes..it makes me think Cape rates will come in.

Tons of volume and just muddling around not looking good.

I tell you who jinxed DRYS, it was Cramer..he recco'd it and the stock went STRAIGHT down..no lie.