Global Ship Lease, Inc. (NYSE:GSL) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 10:30 am ET

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Global Ship Lease, Inc. (NYSE:GSL) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Analyst
J. Mintzmyer

fixing some of that? I know some of your peers have fixed three or four years of they're doing the fixed swaps at like 0.3% or 0.4%, just unbelievable levels. Do you have that potential to kind of freeze in these low interest costs?

Executive
George Youroukos

Yes. We have looked at that in great detail, and we are in position to fix our interest rates. We have employed actually a specialist company for that. As you know, fixing interest rates, it's not that simple to time it at the best time and get the best out of it. We feel that as we see still, there is room for improvement, and we would like to do that, and we are going to do that, but probably in the foreseeable future. But as you said, this is a unique opportunity for us to grab very cheap rates, which we are enjoying anyway, as we speak.

Analyst
J. Mintzmyer

Yes, it's a very interesting opportunity. One other question for you in regards to your first priority 2022 notes. I know we've talked about this for the last year and a half and COVID-19 clearly put a delay in your plans to refinance those, right? They're trading at a discount to par, last I checked. They seem to be trading a little bit under 100% there. And I noticed that you still have decent cash liquidity. Are there any opportunities to repurchase some of those notes in the open market at a discount? Or are you waiting to do a comprehensive refinancing?

Executive
George Youroukos

Ian, you want to take this?

Executive
Ian J. Webber

Sure. Thanks. Yes, we are able to take advantage of the slight discount at which our notes are trading. That said, up to this point, our focus over the last six months or so has been on preserving cash liquidity. We have great contracted cover going forward, but nobody knew three, four months ago how this virus was going to affect the global economy and for how long. And therefore, along with delaying dry-dockings and so on and so forth, reducing capex where we could and we've sort of shut down on repurchasing notes in the market.

As conditions improve, as you've heard from George and from Tom from the market side, where charter rates, asset values, seem to be moving upwards and there seems to be some success in controlling the virus, although it's very, very early stages, we may look to buy notes in the market, but only if it doesn't prejudice our balance sheet and if it contributes, obviously, to the wider refinancing of the balance of the 2022 notes, which remains a strategic objective of ours.

Analyst
J. Mintzmyer

Certainly makes sense. Looking at the latest charter you signed on the 9k TEU vessels, it looks like you did one for about two years that you extended. And then the other one is only for one quarter, it looks like just a short term extension. Can you talk about the timing of those two charters? Because the freight rates