NYSE-listed Tsakos Energy Navigation has priced the shipping industry’s third perpetual preferred equity offering of the month.
The Nikolas Tsakos-led tanker company is selling 3.4 million preferred shares at USD25/share with a dividend rate of 8.75%. The Tsakos family trust is purchasing 200,000 of the shares.
Gross proceeds will be USD85 million or USD97.75 million if the underwriters’ option to purchase an additional 510,000 shares is fully exercised.
Net proceeds will be used for “general corporate purposes, which may include making vessel acquisitions or investments and repurchases of our common shares and preferred shares”, said the company.
TEN’s perpetual share sale was preceded by offerings from Teekay Offshore and GasLog earlier this month.
According to data compiled by IHS Maritime, shipping companies have now raised USD1.93 billion via perpetual share sales. Gross annual proceeds total USD325 million to date. They were USD701 million in 2014, USD468 million in 2013, USD78 million in 2012, and USD359 million in 2011, when the sector first entered the perpetual preferred market.
The sale of perpetual preferred equity allows public companies to raise funding without diluting common shareholders, using a hybrid security that has debt-like attributes (fixed payments akin to interest) but for accounting purposes, is not defined as debt.