Scorpio Tankers Prices Senior Notes

Large tanker fleet owner Scorpio Tankers (STNG) has priced their previously announced senior unsecured notes. These notes are unrated.

The notes are priced at 7% and they will offer 1 million shares (bonds). plus 150,000 for over allotment.

Shares will trade sometime in the next week or so–there will be no OTC trading so you will have to call your broker if you want shares prior to exchange trading with the CUSIP.

NOTE that there is a bonus rate for early redemption (see notes on grid below).

The pricing term sheet can be found here.

13 thoughts on “Scorpio Tankers Prices Senior Notes”

    1. Correction: SBBA is an unsecured note for Scorpio Tankers, a separate entity from Scorpio Bulkers. The two companies share executive officers and board members and have overlapping investments, but do not share the same capital/debt structure at this time.

  1. As a Canadian I find this site a great spot for ideas on US$ fixed income – am looking to have 50/50 mix of US & CDN investments as view your economy having better prospects. Had the Scorpio Tankers BB which recently matured and looking for thoughts on AGNC (common) or AGNCM (Fx to Fl) as option for funds. Thank you for any input

    1. Willow – my reply would depend on where you want these issues to fit into the overall portfolio. Shippers and mREITS are at the high end of the risk spectrum. They have both price volatility and risk of permanent capital loss. I own both Scorpio and AGNC in smallish amounts in my high risk bucket.

      These are not widow and orphan stocks.

      If you’re going to look at AGNC may as well look ay NLY, too.

      For tax purposes, both would be better in an RRSP or similar. That assumes, of course, that withholding gets handled properly. There should be none.

  2. Just sitting here listening to Jim Grant of Grants Interest Rate Observer. He says there is now over $12 TRILLION in low yielding corp. bonds that have been issued. I could list a whole bunch of them myself. Over the last few months I have gotten a daily email from my Schwab Guru-LOL about new issues. The 30 year pieces of paper seem to run from 2.5% to maybe 3.75%. I wish I was a little more knowledgeable on where all this will lead us. One thing I do know is it has certainly fueled this stock market into high gear. We could have all retired to a nice oceanfront plantation had we bought enough back on March 23rd. In my 45 years of investing I don’t ever recall a “recovery” this quickly. Like around 8 weeks and we’ve gotten most of the losses back. At the worst I was down about 12% but now only down around 3 or 4%.

  3. On just a side note, this morning The Hershey Company issued a 30 year bond this morning. Single A rated. The company is over 125 years old. Are you ready for this??? Coupon of 2.5%. That right there tells you what you have to look forward to in the high quality bond world for probably atleast the next 3 to 4 years. It also tells you why the stock market has been on fire as well. I have given up on any return to the March lows. Thats just delusional wishes.

    1. If inflation picks up with all that huge money supply increases, the price of those bonds are going to fall off a cliff.

      1. Really doubt this five year term note will suffer that much from an uptick in inflation. There may be a temporary imbalance, but that will only provide another buying opportunity for the patient investor. Sustained inflationary pressure is also a sign of economic activity, which benefits world trade and consequently the companies that facilitate such activity.

  4. Thanks for the update Tim…I was a long term holder of the senior note Scorpio just redeemed, so there is an open spot in the portfolio for this new one. It will be interesting to see if the market assigns a premium or a discount to SBBA when it starts trading.

    1. I had SBNA as well and it worked fine for me. SBBA started trading this am at around $24.75 and I picked up a bit (I rarely get in very deep with shippers).

      1. Hey Whitney Field…thanks for the heads up. I filled a starter position at $24.75 just before the close. FWIW…Scorpio Tankers also has an unsecured bond that matures in 2022 which currently trades with a YTC of about 8%. Consequently, some folks have suggested that SBBA is overpriced and should trade down to the same level. However, the Scorpio bond really isn’t accessible to the average retail investor and certainly not with a 25 basis point spread.

        1. All very good points about the bond, Citadel West. I also don’t mind getting the interest paid quarterly. With the first one coming right up on June 30, I’d guess the ex-div would be around June 15.

          1. Just double-checked the prospectus – so that’d be holders of record on 6-15. And the interest starts accruing 5-29, so the first payment will just be a partial.

Leave a Reply

Your email address will not be published. Required fields are marked *