Navios Partners seeks new $400m facility

Angeliki Frangou-fronted MLP begins syndication for loan in latest round of balance sheet work.

Navios Maritime Partners is seeking a new $400m term loan B as part of a continued effort to strengthen its balance sheet.

The bulker and boxship owner has launched syndication for a facility to refinance its existing term loan B.

Mike Webber of Wells Fargo says the MLP had $386.3m to pay on the loan at the end of the fourth quarter.

He explains a successful refinancing of a facility that matures in June 2018 would remove a significant overhang on the stock.

“We'll be watching the process closely, as it's one of larger remaining obstacles for Navios Maritime Partners to tackle,” he said.

Navios Partners announced the plan today just 24 hours after reporting a stronger than projected fourth quarter performance, with earnings per unit of $0.09 beating the $0.01 per unit consensus.

Jonathan Chappell of Evercore ISI noted in a post-results report the MLP’s "capital structure was vastly improved" but it “had far more wood to chop”.

Navios Partners has repaid $178m in debt since the start of 2016 and raised $125m from asset sales.

While 2017 debt repayments stand at only $32m, Navios Partners faces what Chappell calls a “daunting mountain of debt maturities” running to $386m in 2018.

“Now we believe its improving financial status and its historical banking relationships, as well as an improving dry bulk market outlook, will enable Navios Maritime Partners to refinance or attain new debt to help meet these obligations,” he said in a report written before the owner's statement today.

Noah Parquette, an analyst at JP Morgan, has identified the refinancing of the term loan B as a key moment before Navios Partners can resume dividend payments.

Angeliki Frangou, chief executive of Navios Partners, said on the company’s fourth quarter conference call that 2016 had been “the worst year in recorded history for the dry bulk market”.

She described today’s environment as “the right point of the market for a growth strategy”.