{"id":16176,"date":"2016-01-07T16:03:56","date_gmt":"2016-01-07T21:03:56","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16176"},"modified":"2016-01-07T16:03:56","modified_gmt":"2016-01-07T21:03:56","slug":"nowhere-to-hide-as-baltic-fried-index-careens-to-fresh-record-low","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16176","title":{"rendered":"“Nowhere To Hide” As Baltic ‘Fried’ Index Careens To Fresh Record Low"},"content":{"rendered":"

“Nowhere To Hide” As Baltic ‘Fried’ Index Careens To Fresh Record Low<\/a><\/h3>\n
Another day, another fresh all-time record low in The Baltic Dry Index as Deutsche Bank’s “perfect storm” appears ever closer on the horizon. Plunging 4.7% overnight to 445 points, this is\u00a020% lower than the previous record low in 1986<\/strong>\u00a0and as one strategist warns,\u00a0“It\u2019s a brutal start of the year, there\u2019s just nowhere to hide on the market.”<\/em><\/strong><\/div>\n
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“This looks like a ripple effect from what happened back in August,”<\/strong><\/em>\u00a0adds Alexandre Baradez, chief market analyst at IG France, hopefully looking forward, “it might continue for a few weeks, but given China\u2019s central bank fire power, it shouldn\u2019t last for more than that.”<\/p>\n

But Deutsche’s “perfect storm” looms…<\/p>\n

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The improvement in dry bulk rates we expected into year-end has not materialized.\u00a0<\/strong>And based on conversations we’ve had with several industry contacts, we believe a number of dry bulk companies are contemplating asset sales to raise liquidity, lower daily cash burn, and reduce capital commitments.\u00a0The glut of “for sale” tonnage has negative implications for asset and equity values.\u00a0<\/strong>More critically, it can easily lead to breaches in loan-to-value covenants at many dry bulk companies, shortening the cash runway and likely necessitating additional dilutive actions.<\/div>\n

Dry bulk companies generally have enough cash for the next 1yr or so,\u00a0but most are not well positioned for another leg down in asset values<\/strong><\/p>\n

The majority of publically listed dry bulk companies have already taken painful measures to adapt to the market-\u00a0some have filed Chapter 11, others have issued equity at deep discounts, and most have tried to delay\/defer\/cancel newbuilding deliveries.\u00a0<\/strong><\/p>\n

The additional cushion, however, is\u00a0likely not enough if asset values take another leg down<\/strong>; especially given the majority of publically listed dry bulk companies are already near max allowable LTV levels.<\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“Nowhere To Hide” As Baltic ‘Fried’ Index Careens To Fresh Record Low Another day, another fresh all-time record low in The Baltic Dry Index as Deutsche Bank’s “perfect storm” appears ever closer on the horizon. Plunging 4.7% overnight to 445 points, this is\u00a020% lower than the previous record low in 1986\u00a0and as one strategist warns,\u00a0“It\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[3594,8023,130,6767,195,200,8584,333,805,4318],"class_list":["post-16176","post","type-post","status-publish","format-standard","hentry","category-economics","tag-baltic-dry-index","tag-chapter-11-bankruptcy","tag-china","tag-covenants","tag-debt","tag-default","tag-deustche-bank","tag-france","tag-trade","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16176","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16176"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16176\/revisions"}],"predecessor-version":[{"id":16177,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16176\/revisions\/16177"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16176"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16176"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16176"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}