Global Ship Lease: The 8.7% Preferred Dividend Is Well-Covered

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Credit: Roy Liz Barlow
  • Global Ship Lease is still benefiting from the historical tailwinds in the container shipping sector.
  • The preferred dividends are very well covered.
  • There is about $900M in common equity ranked junior to the preferred shares.
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The only task of a preferred share is to continue to

This means Global Ship lease generated plenty of cash to cover the dividends on the preferred shares and the common shares (just under $16M combined). The strong cash flow obviously helped GSL to complete the $123M purchase of the sale-and-leaseback vessels subsequent to the end of the first quarter. The company’s cash position increased to $125M as of the end of Q1 while the total gross debt level was approximately $880M resulting in a net debt of just over $750M. This is backed by a book value of the vessels of in excess of $1.6B. And as you can see below, this means that there was about $900M in common equity which ranks junior to the preferred shares.

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Source: Seeking Alpha