Q2 2020 Global Ship Lease Inc Earnings Call

And gentlemen, thank you for standing by welcome to the global ship lease second quarter 2020 earnings call.

All participants are in listen only mode. After the speakers presentation. There will be a question answer session. We asked a question during the session. Neither press star one on your telephone.

Our operator says Mr. In program. Please first starting zero.

As a reminder, todays conference is being recorded.

I'd now like to use your first conference call Mr. getting Barber Chief Executive Officer of Global ship lease you may begin Sir.

[music].

Thanks, very much a good morning, good afternoon, everybody and welcome to the sluggish at least second quarter 2020 earnings Conference call.

That's normal the slides that accompany todays presentation are available on our website.

These WD global ship lease Dot com.

Also as a normal slides one I'm sure you remind you that today's call may include forward looking statements.

Based on current expectations and assumptions at all by their nature inherently uncertain and outside its companies control.

Actual results may differ materially from these forward looking statements due to many factors, including those described in the Safe Harbor section of the slide presentation.

We also draw your attention to the researchers section of our most recent annual reports on form 20-F, which is for 2019 and was filed with the FCC on April 2nd 2020, I'm, which you can obtain bar website school, Bobby I see sage.

One of my statements all qualifying bodies and other disclosures and my reports filed with the FCC.

Do not undertake any duty to update forward looking statements.

Reconciliations of the non-GAAP financial measures to which we will refer to during the school. So most directly comparable measures calculated and presented in accordance with gap you should refer to the earnings release that we issued this morning, which is also available on our website.

I'm joined today by our executive Chairman.

Did you read across our Chief Financial Officer, <unk>, I'm, not Chief commercial officer published.

George will begin the call with some part of a commentary and an update on my commentary is a focus on an asphalt terminal I will take you through quarterly results our financials.

The current market environment, after which would be pleased to take your questions.

Turning to slide sorry, I'll pass the call to George.

Thank you again.

So first quarter bad things cool, great do has changed in the war.

And then that's container shipping industry.

Economies are beginning to the opening in many countries containerized trade volumes, starting to improve and importantly policies have been put in place many balls that make it possible for supernus safely disembark and reestablish more normal quotations.

Hi, and passionate a great food so what about grew well have continued to operate those ships through the highest stand that's throughout this difficult period.

At the same time go get 19 continues to be a major Fox started many areas and much remains unknown willdan forwards.

With that perspective.

Oh priority continues to be maintaining vigilance and resilience in this challenging environment.

The spends about people how sips medical Misoprostol.

Oh specific areas well for Bush remained largely consistent with those we discussed last quarter.

But prioritizing the safety in welfare of especially and I love to see as shown on shore.

And would take an old appropriate steps to protect and support our colleagues.

We're focused on maintaining strong liquidity and a healthy balance. It you know did would have been strong flexible and resilient throughout all market conditions.

Oh, sorry, the Gi and south of portfolio.

With us in a good position here as we have 660 millions of contracted revenue over the knowledge of more than 2.3 years.

The only $5 million wolf debt maturities between now and late Twentytwenty too.

We continue to engage constructively with GAAP does provide us owned intended these financing or about 2022 bond.

That leads you November 2022.

And it remains our intention to but she was that the financing on an opportunistic basis when market conditions I sufficiently supported.

You know what is a benefit fully but more extensive conduct carbon we strive to maximize commercial and operational uptime of all ships.

Further we have remained active in shopping and without a high quality, well, especially if I sleep.

I'm pleased to see that we currently have Oh and tie up fleet.

On time charters.

By the fact, the global fleet.

I thought that spike into the double digits on the percent that's basis in the second quarter.

The liner companies have modest capacity to meet reduced demand.

These charters success closely related to our ability to offer consistently excellent service or liner operator partners, providing them with reliability operational flexibility low slung costs and higher capacity there like important everyday.

Oh would address this in more did they doing his market overview.

But it is worth noting that the number of the was leading lighten the companies.

Customers amongst them.

I've noted for to do their jobs for the first half the year have significantly exceeded expectations.

Against what was widely expected to be a major that's their ability to operate in a challenging market.

Eliteness, although I don't have type.

Supported by a far higher deal pricing and capacity discipline, that's has ever been seen in the past.

I was with us.

I think recent preference for not badly that allows the sips.

The trade.

Those with the lowest lacoste.

Flexibility.

Inappropriate at least a capacity.

The next them to maximize that profitability in good times and but.

Finally, what primarily focused on vigilance and resilience.

We also recognize that that a tentative signs of what then send like what on the good comedy.

Our balance sheet in South Africa, that's been but were not dependent upon that he got there being any of them event.

But we're making sure the global ship lease using their position to fully benefit from that he got but when it does take place.

Yeah that was done but gone too young put it in view of our fleet and saw the portfolio as well as an overview of recent highlights.

Well thank you George.

On slide four you can see how Charleston, <unk> pool farther from which on highlights a few points.

We have some $659 million are contracted revenue.

The two year weighted average remaining contract duration of 2.3 years.

As George mentioned, what about ships are employed on punch office.

And Dave I'll give him up to 21 year old feeder ships, which we sold in July we had only 33 days of idle time between Chaucer's during the during the quarter.

Recently agreed chances are mainly short time, giving us coverage through the immediate future, but retaining the ability to re fix and the medium term in a charter market that has already moved materially off it slows.

Opportunism, notwithstanding it's important to keep in mind at 97% of our adjusted EBITDA for 2020 is already covered by contracts and 75% for next year 2000, and trends you want giving us a great deal of comfort and materially limited limiting I've downside exposure.

On slide five I'll provide some color on reefer capacity, an area that we touched on last quarter, but which has become even more important as market conditions and high idle tonnage controlling the stock comp trust between the hubs and the have nots the global container fleet.

Reefer temperature control called <unk>.

Like foods medicines, and the like is the fastest growing elements of containerized trade.

And the service for which the liner companies are able to charge a premium against the standards dry cologuard.

Hi, its long the companies, but for ships that can carry a significant portion reefer containers.

What's required to vessels to have incremental generation capacity at the appropriate worry to allow the can take us which were effectively huge fridges to be club <unk>.

Well, we shipped leases invested in high reefer capacity ships, including upgrading the recent capacity or pre existing tonnage.

As you can see on the left hand side of the slide slide five.

Vessels have recent capacity that is meaningfully above the media for the vessel classes in which we operate.

And then the case of some of our post Panamax vessels represents the gold standard.

People fleets, where few midsized and smaller ships meaningfully exceed a minimum threshold three for capacity.

And you can see from the holiday circles on the chart that we still have opportunities to further expand expand the recent capacity of certain of our larger ships the best in class spaces.

Just as with our low salt costs. She is a function mainly a fuel efficiency about ships for that carrying capacity. The reason we want to highlight this aspect to our fleet. It's but this is crucially important to along that line a company customers.

Great for capacity ships receive preferential employment, even and we charter markets and they come on premiums in place earnings and vessel valuations.

Moving on to slide six we've outlined our second quarter 2020 results and year to date highlights.

We continue to generate strong predictable cash flows contracts you're trying to cover.

$71.4 million of operating revenue up 13% on the equivalent quotient 2019, mainly as a result of additional ships and I fleets. We've added seven ships will say since then.

Oh that revenue generated $41.8 million of adjusted EBITDA up 9% on 2000 monkey.

And $13.5 million of normalized net income, which is adjusted for non cash impairment charge of north point $9 billion relates to the sale of the two feet of vessels, which were completed in July.

This normalized net income is up 62% on Q2, 2000 and long chain.

Reported net income so off to that's impairment charge.

$12.6 billion, <unk>, which is up 51% on 2000 that Monte.

Our operating performance for the quarter. It reflects a tiny bit mine Timberlake it impacts would utilization of just under 90% negatively affected by extended drydockings and delays in the sales process divestments of the two oldest fleet of vessels in our fleet.

Our operating expenses of $24.2 million reflects the additional several vessels seven vessels in our fleet compared to 2019.

I <unk> $5902 <unk> ownership day. These expenses are down some 57 million adult $57 per day, a 1% compared to second quarter 2019.

As a result to further improve ship management, partly offset by those additional vessels. The seven that we purchased Wobig post panamax and thus slightly more expensive to run.

Commercially we've extended will secure new charges for 11 of our ships in the period.

Including five feet the ships for short periods of between 6000 $608000 per day.

I'm six non feet of vessels launch of vessels, that's a wide range of rights over a period spanning from as little as two months, so as much as almost two years.

We started more detail in our press release this morning, but broadly speaking charters skewed towards being short situation, particularly for the run this would be lower rate charges to take the opportunity of fixing the upside going forward.

And as Tom will illustrate we're currently seeing meaningful and pretty recent day rights across these segments as market dynamics improved improve often the pronounced kobin long team driven blown up recent months.

I will start recently completed the previously announced sale at biopsy launches. So I've two oldest ships that launching 99 built just so much Jason you truly.

After some kind of bit 19 related delays in the process earlier in the year.

We've also taken a number of steps just to sort of the strength and de lever already solid balance sheet and we're also benefiting from historically, Larry legal affecting our interest cost.

Importantly between now and late 2022.

Two years out.

We have only $4.7 billion of debt maturities $4.7 million of debt maturities, which is very well covered by extensive contracted cash flows.

We're continuing to de lever, having any more dollars $20.5 million in second quarter 2020.

Although compensated for the majority of our test a floating rate and with long Board historic lows.

We're also benefiting from reduced debt service costs.

We remain in discussions regarding the opportunistic refinancing of the $267 million.

2022 notes or they're just an outstanding.

With that I'll turn the call over to Tom Mr. to walk us through the market.

Thanks again.

Let's turn to slide age.

No trying to call the shape and timing of the world's recovery from trade with 19 is challenging to say, the least especially when overlaid with rumbling geopolitical and trade tensions.

However, so at least provide a framework and the slide we present emphasize full costs, which all have you caveated and will change as conditions continue to evolve.

So on this basis, we're looking potentially at cargo volumes shrinking by between seven and 8% in 2020, some more or less inline with what we saw in 2009 during the global financial crisis.

Followed by rebound or more than 10% in 2021.

The top right you can see that I'm ESI reckons, all trades will suffer and twentytwenty.

But the main lanes are thought to the Trans Pacific and Asia, Europe trades are likely to be hardest hit.

Oh from rights you can see the anticipated demand impact in aggregate set against a much high conviction estimates of city the capacity growth of only 2% or sorry, if this year next.

Turning to slide nine.

This slide shows what's happening in the fleets and Charleston markets.

Let's take the left on chart first which provides freight rate indices for containerized collagen China.

You can see the freight rates came under pressure as cobot 19 first to China, and then became a worldwide phenomenon.

So there's nothing particularly surprising that.

Much more interesting however is that hey, even when the impact of ours was at its worst in the second quarter Capex was still up year on year.

And be.

Rates trending up.

This is a testament to the capacity in pricing discipline exercise by the container shipping lines, which are expected to translate into positive financial results fill the void by low fuel prices.

Looking forward to seeing line of companies to Q results and we're encouraged by those we've seen to date.

Turning to the onetime charge you can see how charter rates so our industry.

Behaving in a short time charter markets.

Ken charter rates came under significant pressure as cobot began to take its toll on the global economy.

Lets paulson Dallas in June and then as economies started to reopen began to some again led as was the case during the strong walk into 2019 by post Panamax ships.

Slide 10, what's called charter rates, an asset values in a broader context charter rates the red line, even during 2019 well below the historic average for the last 21 years, so that implies that maybe further upside.

But no more or less where they were at the beginning of 2019, but still above where they watch your in global financial crisis.

On the other hand asset values, but don't Blue line of remained well below levels seen during the debt for the global financial crisis, suggesting that although there is somewhat some downward pressure on bodies, especially for older ships.

No asset Bonnie bubble to bust this time around.

It's worth remembering and I'll come back to this Lisa.

The order book defeat ratio immediately before the global financial crisis with about six times, while on the percentage basis than it is today.

The significantly lower order book, we see today as a product of disciplined ordering in recent years.

He driven by constrained access to capital.

Be by more coordinated approach to capacity ordering a management by the line a bigger alliances.

Partly by yard consolidation.

By the retrenchment of the tax advantage German kg scheme, which it incentivized speculative ordering of ships in the years running up to 2008.

Slide 11 emphasizes the operational and commercial flexibility the midsize and smaller Containerships, we focus on it yourself, explaining why they form the backbone of global container trade.

The deployment maps of the told the slide.

On software sub 10000 to your ships of operation, which is everywhere buses, where the big ships have deployed which tends to be on the main lane east west arterial trades, namely the Trans Pacific and Asia Europe.

Meantime, the Pie chart, a bottom left shows the composition of global Containerized trade roughly 70% of which by two you volume is a non main lane intermediates and regional trades typically so apply midsized and smaller ships like house.

Slide 12 wraps up the section by focusing as promised earlier on the supply side of the picture.

As you can see a top left idle capacity in the market reached north of 10% highest level in fact seen since the global financial crisis.

However, and this is an important however, the children who runs through to the end of second quarter Twentytwenty.

During the course of July idle capacity has come down on is now around 6.6%.

This is being helps and not only by improving demand, but also by gradual reopening of the big ship recycling facilities, allowing for the deletion of marginal tonnage from the global fleet.

We expect this recycling activities to continued acceleration.

So while we fully acknowledge that the market remains fragile and unpredictable. They're also some encouraging signs and as we've said before we believe the supply side fundamentals laid out at the bottom hole to slide, namely negligible well negative net fleet growth combined with a minimal orderbook pipes.

Provide the foundation for an earnings to be bound for midsize and smaller containerships when the recovery takes hold.

Well not notes I'll hand, the call over the tonsils to talk you through our financials.

I.

Thank you Sam.

Slides 14, 15, and 16 show I know did pro forma consolidated balance sheet statement of operations and states mental gas flow based on the second quarter of to southern Twentytwenty.

Rather than going through every line night, and let me point out if you keep items.

We generated revenue of 71.4 million during the second quarter.

The 8.3 million increasing revenue year over year was principally due to the acquisition of seven vessels scenes previous year.

For the six months' with Twentytwenty, we generated revenue of 142.3 million up 14.7 million comparing to 127.6 million into quite a bit between 2019.

We generated net income of 12.6 million for the second quarter of 2000 Twentytwenty. After a non cash impairment charge 0.9 million for a two bases Ken for sale.

Six months of 2000, Twentytwenty, we generated net income of 15.2 million. After a noncash impairment charge of 8.5 million was related to our two vessels good for shale and 2.3 million premium based on the redemption 46 million for 2022 notes compared to 18 million unique about it.

Defeated.

We have still experiencing extended seep your time due to the effects of divide listen congestion as well as extended idle time, you do operational difficulties on executing the sale for vessels.

As a result in the second quarter of 2000, Twentytwenty did what 210 Blondo, Florida days for the ones. They said for regulatory Drydocking and describe an installation of two other devices owning progress I sort of end of quarter 20 days will fund blend of higher and 194 days survival by last time related mainly to our two.

This is good for sale and delayed by coping 19, both restrictions, giving utilization of 89.6%.

Yeah, but its operating expenses paid ownership days, including management fees in the quarter was 5902 down $57 per day year over year. Despite the acquisition of the seven vessels noted the bull well, the which are post panamax with higher daily operating expenses.

The average operating expenses for the six months ending June 30 doesn't Twentytwenty was 6125 per day compared to 6042 would be in the comparative period.

Now the general administrative expenses were 2.3 million for second quarter of 2000, Twentytwenty compared to 2.5 million. This same quotes in 2019.

Yeah, but its engine and in ethylene. He said if expenses paid ownership days in the second quarter of 2020 went down to 567 from 700 and paying the same quarter in 2019, a decrease of $453.

The total cash on hand, I still think of the quarter of 2000, Twentytwenty was 89.7 million after the redemption and thirties, yes would be for 2022 notes for about 57.8 million and 23 million for pay tissue two vessels.

I won't go through them in beaten now, but as always we have also included on slide 17, and 18 or beat in Capex guidance and adjusted to be that calculator, plus if you with your modeling.

I'd now like to turning the call back to Georgia for closing remarks.

Thank you that's I would give you summarized on slide 20 before.

Moving to your question.

I was we know the global economy continues to be disrupted by covert 19.

However, global ship lease has been well said bio extensive concept Gaba.

<unk> fleet and a focus on business resilience.

During the second quarter auto toxic fleets of slow of low slot cost.

Hi, Lisa capacity midsized and smaller containerships supported by a well established relationships with lid liner operators enabled us to maximize on high time and secure strong stable cash flows despite the challenging market with an oversupply of soups in some size segments.

The diamond and save of global economic recovery remains difficult to corn, but let's see a number of visions for cautious optimism.

Following the shop declines over much of the first half the year freight rates inside the rates.

Both the bones in recent weeks, we that's the top I'd see fast in well specified both by them expenses, particularly those with Hyatt Abbas.

Like those don't fleet.

Yes, I showed you that market recovery in 2019.

I'd be containership capacity has fallen significantly from a high of 11.7% in Q2 to 6.6% by the end of July.

Further the opening of ship recycling facility. This is allowing marginal donuts deleted from the global fleet.

Oh, Charteris 11 companies have demonstrated impressive price and capacity discipline, maintaining and even expanding margins.

Against that salads in micro economic backdrop.

Unlike.

I don't dubs the eventual both corporate bank in the month comedy is set to take place against a supply side back.

Mark.

Yes dying.

But particularly in the size segments in which we operate and this is a very important point.

Ladies and gentlemen.

Yeah, well specified lotion lot cost Heidi circa plastic container ships structurally undersupplied segments.

Well she believes should benefit from a tightening market, even if I'm 17, it kind of a tonight.

With that we'll be pleased with take your questions.

Ladies and gentlemen, if you have a question or comment at this time. Please press the star than the one key on your Touchtone telephone. If your question. It's been answered you wished it with yourself from the Q. Please press the pound Keith.

Our first question comes from Liam Burke with B. Riley.

Yes. Thank you idle capacity so peaked at 10% it's coming down pretty steadily now you mentioned I believe is 6%.

How do you view the short term I mean, it's implying that the traffic volume container traffic volumes are increasing or improving how do you view the second half of the year early 2000 2021 in terms of anticipated container volumes up or down.

Well.

I'll try to answer that and then Tom Cannell should give you. His view is quite difficult to predict I mean this the million dollar question for all liner companies, but the consensus is that all liner companies I gearing up.

I'm trying to to secure tonnage.

For asked low slot cost on that's which seems to me that what's the expectation is that.

Ted Williams <unk> Glyn to pickup in the second half off the year.

Otherwise it wouldn't be seen so much activity shopping activity you know, but so much satellite companies trying to see good tonnage for the next six months or or more.

Tom will do you have some or something that's right.

No I think that pretty much covered this but what I'd say you them as you know the liner companies are much closer to the underlying demand a set of cargo flows than than wheel and as George said the than does the the charter rates shown on slide nine a number of mines have been.

Going long on tonnage and that would suggest that at least on see some sort of recovery in bookings, but yeah again as George said, that's what the multimillion dollar question.

Fair enough.

And then your Opex per vessel per day dipped below 6000, how do you see directionally going into the second half of the year.

Well one aspect that we have seen that help our opex go down a bit more than anticipated is the fact that we have not been able to.

Exchange Cool you quoted it was no we're not allowed the who changed to happen now a we are going without doing as we speak more and more of these goods to change there's no we're supposed to happen earlier.

ER, which we expect winning.

Increase a little bit not not materially our Ah opex for.

Yeah, and now that I think that my daughter, showing presumably the Opex is the fact that the coastal tickets has a increased about 100%.

The big number of course, you not opex, but just to mention since you asked the question.

That's something that we expect that might or increasing the cycle, how but all of that not knocking must be it hasn't really.

Great. Thank you.

Our next question comes from shade Min private thought even investors that's.

Hi, Good morning, good afternoon, gentlemen, thanks for taking my question.

Country.

So I you know first of all looking at your presentation I notice that you have a majority of your debt on floating terms out with live were down to really near all time lows what are their prospects of fixing some of that I know some of your peers have fixed three or four years of they're doing a fixed swaps at like <unk> 0.3 year 0.4.

Percents, just unbelievable levels do you have that potential to kind of freeze and these low interest cost.

Yes, we have looked at that in great detail.

And that we are.

In position to fix our interest rates, we have employed actually especially in this company for that.

As you know.

Fixing into say, it's it's a it's not that simple to time to time, we thought the best time and get the best out of it.

We feel that as we seize deal there's room for improvement and the you know we would like to do that and we're going to do that.

But probably and in the foreseeable future.

But as you said.

This is a and unique opportunity.

For us to grab but they too are rates, which were enjoying anyway as we speak.

Yeah, it's a it's a very interesting opportunity one other question for you in regards to your first party 2022 notes I know we've talked about this for the last year and a half and covert 19, clearly put a delay in your plans to refinance those right. They are trading at a discount to par last I checked they seem to be trading a little bit under.

100%, there and I I noticed you still have you know 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.

And do you want to take this show Charlie Thanks.

Yes, where we are able to take advantage of let's say, the smart discounts, which I'm not so are trading.

Got subs up to this points a effect because over the last six months or so.

Has been on preserving cash liquidity.

Or we have great contracted cover going forward, but nobody knew a three four months ago held as far as she is going to affect your global economy and for how long I'm back for no along with the laying drydockings and settlement staples.

Eastern Capex, where we could you know weve sort of shut down on on repurchasing boats in the market.

I was.

As conditions improve.

Her from Georgia from from Tom I'm, a firm from the market side, where charter rates asset values seems to be moving out what's on the seems to be some success in controlling the boss load, it's very very and stages or we may look to Tobias partners in the market, but only.

If it doesn't prejudice our balance sheet.

And if it contributes obviously to the <unk> the wider refinancing of the problem since the Prince turns to notes, which remains a strategic objective of wireless.

Certainly makes sense I'm looking at the latest charter you signed on the nine Katy you vessels. It looks like you did one for about two years that you extended and then the other ones only for one quarter. It looks like just a short term extension I can you talk about the timing of those two charters because you know that their freight rates you know dropped right into the April and May and sort of troughed.

Right and then they've been recovering as you mentioned even in your presentation I quite impressively lately, where those terms I conducted recently as in like the last couple of weeks or was there something you did more so in the start of the summer.

Well the the fast I think show the short one.

Was done at the.

Let's say the eye on the storm.

You know when a one shot this simply.

They didn't live up seeps without thinking about.

Any any new shopping so any sips uptake.

And because of that we've made the decision.

To fix.

The Sip very short.

How should we expect that the market was not gonna stay in that state for too long.

And it proved to be evident good then decision.

I was the next it.

Game opened a bit later.

So roughly a month Nate they'll show because if I recall and that we were able to think.

More at least that market levels.

Since they subset so.

They have such a high spec sophistication. So those were both fixtures.

On a sometime ago, but whether it be suddenness of any sense of about a month or be more between them.

So the first they change that isn't it is showing you the bottom of all overall, both dumps a in the container market, we have seen and the other thing. So shows you a more normalized situation like where now.

Certainly makes sense. So he is it fair to say that as long as things are stabilized to when the idea is up for a new charter I really just in a couple of months if not weeks correct that it should be hopefully similar levels of the Myra if not stronger.

I wouldn't want to jinx, it [laughter], but I'm, keeping my fingers that get gross [laughter].

[laughter] skewed the fingers crossed final question I really appreciate your time. This morning, Oh, there's preferred I sort of a preferred class of equity that was issued along with the Poseidon merger. There basically the same as common shares except for they trade data. They stayed as a preferred class until the 2022 notes are resolved is that the only.

Other contingency there. So once the 2022 notes are resolved that converse immediately or are there other sort of by requirements as far as that conversion to common equity.

Yes.

Yes.

Im sorry, it's it's the only driver.

Excellent definitely makes sense.

One of the merger you want to make sure. Those notes are taking care of thank you gentlemen for your time and congratulations on a navigating the shift to the storm.

And thank you.

Our next question comes from Joseph ourselves with Cantor Fitzgerald.

Hi, Thanks, guys two questions one on the book to build and when vessels are being scrapped or do you have the insight whether they're reefer or regular container D. Do you have any insight into the difference.

<unk>.

Do you mean, when we read them they bought a specific vessel endoscopy, whether we know if that she has a highly pick up capacity or not right exactly yes.

Yes, we well and they seem.

As a registry and that description show, we can always check and the view what types of citrus crops and what is the these ships.

Really for capacity and other characteristics. The answer is yes, we do know okay. And then I'm wondering you have quite a few different facilities.

Could you give us some color on what assets.

Our unencumbered and could be used for a pen potential refinancing of the 20 views.

The notes that mature and 22.

Yes, I lost the toughest to.

Come to this and that's can you please answer.

For the refinance as you're going into Stan.

The got insecurity packets of the existing bone will be let's say the main pillar of our next refinance of course, we do have some another five unencumbered vessels seen or feed that kinda sees so we'd be benzyl the proposal off the refinance a I thought time and.

The amount of course.

Okay, and many Oh, my gosh, I may add to that I might add to that that you know this instead, we have a free we held you'll have some post panamaxes and this category and that those ships can get quite a substantial shot that eights and and longer chopped at age which also helps.

As.

As weve being the Simpsons refinanced back that's because they offer.

You know long that employment and visibility of cash flows and that's what we're trying also to use that that helps a lot that he finance.

I'm just once again to that specific ships that are unencumbered.

Our townsman.

CNH.

Dimitris why.

And then the GFL Kristen.

And the DSL Nicoletta witches spends Jordan tonsils, that's all post panamax ships.

All five of them yeah.

Excellent. Thank you and in and just wondering is the is the city or a super senior loan I see it on slide 24, it's it's about 4.7 million has that been paid off since quarter end, because there's amortization <unk>.

You bet you do will be they don't October.

I cannot journey, okay. Okay.

Okay, great. Thanks, guys.

Again, ladies and gentlemen, if your question or comment at the time. Please press the star in the one key on your Touchtone telephone.

Our next question comes from Mitchell blended CBC.

Hi, guys. Thanks to the coal in about the woman's on just one quick one from my side to this so when they buy back on that you had.

And if I'm not yet use those proceeds to pay the bond Dan.

Oh for a period of time mix, yes, but a in the meantime, we could use the proceeds to reinvest in ER and ships, but we would then put into the collateral.

Package right, so that's something but some optionality, but ultimately.

If we're unable to use the funds for anything else then, yes, they would coats and to reduce the outstanding bonds.

Okay.

But 12 month period.

Yes, you have to use that within <unk>.

He is a competitive advantage, but I don't know, whether it's a commit within 12 months or and execute within 12 months, but it. It is a 12 month period, we have two years.

Through July next next July next year.

Our next year can you walk in holding to those.

Test into you know you don't need it basically.

<unk>.

Yeah modem luxury that's just optionality.

Okay understood. Thank you very much and well, though again.

[music].

And I'm not showing any further questions at the time I turn the call back over to you lever for closing remarks.

Oh, Thanks, very much time. Thank you for listening. Thank you for your questions are we look forward to providing a further uptick for you.

On our Q3 earnings conference call in three months time. Thank you.

Ladies and gentlemen, just conclude todays presentation. You may now disconnect have a wonderful day.