NM 8⅛ 02/15/19

Publicly traded companies mentioned herein: Navios Maritime Acquisition Corp (NNA), Navios Maritime Holdings Inc (NM), Navios Maritime Partners LP (NMM), Vale SA (VALE)

Highlights

The presenter is long Navios Maritime Holdings’ (NM) 8.125% 02/15/19 bonds and considers the opportunity to be “one of the most interesting in the high yield market” at this time. The corporate structure is somewhat complicated, with five different entities (aka boxes) in total and NM has ownership of three [Navios Maritime Partners (NMM), Navios Maritime Acquisition Corp (NNA), and Navios South American Logistics (NSAL)]. As it relates to the long position, the value of the vessels pledged to the debt, the 50% stake in NNA, and the expected EBITDA from NSAL’s settlement with Vale are important to consider. These bonds have lagged the high yield market, and the risk/ reward in the low 80s is favorable because downside should be limited by asset value and the bonds could be worth par if there is a lump sum settlement and/ or cyclical recovery in dry bulk.