Presentation

Borealis Finance LLC is a shipowner and operator established in 2017 in the Marshall Islands. The company indirectly owns 24 container vessels of various sizes and two ~75,000 dwt panamaxes, all exclusively managed by Borealis Maritime Ltd. Borealis Finance spent 2019 optimizing its portfolio by replacing older, smaller vessels with newer, larger tonnage. The company is privately held and ultimately owned by KKR managed funds (99.75%), with a USD 200m senior secured callable bond outstanding.

Borealis ended 2019 in good fashion and had solid contract coverage in Q1’20 but has since been forced into a challenging Covid-19 affected market. The company has continued its strategy from 2019 of renewing the fleet, and has sold one container vessel and one panamax so far in 2020. Despite this, we believe the bond offers an attractive risk-reward at current pricing as scrap value of the fleet is estimated to roughly cover the net value of the bond at today’s quote.