Global Ship Lease (GSL) was an idea in my shipping basket at the start of 2024. I monetized on my GSL taxable ac shares towards the end of Q1 2024, and the Roth ac shares midway thru Q2. All transactions were gains. No position currently. But GSL is executing well.
GSL have set up a new $300M secured loan facility. They intend to use the facility to streamline existing debt facilities. GSL has done something similar previously, so it seems like this strategy is in their playbook.
Why is this significant?
Because GSL has been aggressively paying down its debt the last few years. End of Q2 2024, gross debt was < $750M. The company has targeted debt under $500M by the end of 2025.
The major risk with GSL is the age of their fleet.
- About 1/3 of their fleet is > 20-years-old
- About 2/3 of their fleet has crossed the 3 dry-dock stage (delineation between modern and not-modern)
Don’t know the trading routes of their vessels. But I would imagine GSL’s various vessel sizes would give them the flexibility to trade more routes than other container companies. Their smaller vessel sizes are probably leased to major liner companies to fill that niche. That said, the major liner companies do have an age cut-off. GSL is aware of this - some of their vessels currently chartered to Maersk hit the age mark in 2025.