Approximately half of Navios Maritime Acquisition’s (NNA) debt is non-amortizing. This is a type of loan where payments on the principal aren’t made. Interest payments or minimum payments are made regularly. It provides significant cash flow visibility.
NNA’s senior notes mature at the end of 2021. There aren’t any debt maturities on bank debt until 2016. Due to bond refinancing in late 2013, NNA doesn’t have any significant debt maturities until 4Q21. NNA estimates that leverage ratios will continue to decrease—mainly due to the cash flow benefits.
For 3Q14, NNA recorded a debt-to-assets ratio of 69.96%. Other shipping companies include Teekay Tankers Ltd. (TNK), Tsakos Energy Navigation Ltd. (TNP), Scorpio Tankers Inc. (STNG), and Capital Product Partners (CPLP). TNP recorded a debt-to-assets ratio of 52.9% in the latest quarter.
The Guggenheim Shipping ETF (SEA) tracks the companies listed above.
Balance sheet and specific items
Overall, NNA’s financial structure provides lenders with additional comfort. It stabilizes the balance sheet. At the end of the quarter, vessels—net of depreciation—increased by $1.6 billion. This was mainly due to more vessels. Total assets were $1.8 billion. Total debt was $1.28 billion.
NNA also acquired a 2010 Japanese Very Large Crude Carrier (or VLCC) vessel for $75.5 million. The new vessel delivery will be added to the collateral package of NNA’s senior secured notes. Then, the cash collateral will release. Also, with the addition of two VLCCs and six product tankers, the collateral package’s value will improve by $2 million.
Capex and liquidity
NNA’s capital expenditure is fully funded. It provides a stable base for the company. For the five vessels that haven’t been delivered yet, NNA expects to pay $102.4 million. Almost $82 million is due in 2014. $20.5 million is due in 2015 when the remaining four vessels are due.
NNA had a total pro-forma liquidity of $194.8 million at the end of the quarter. This included $154.8 million in cash. NNA has more than enough cash on hand to fully fund the remaining balance of new building commitments.