Published April 22, 2009

FSL Trust to give DPU of 2.45 US cents for Q1

Firm doing well with stable cash flows from lease portfolio

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FIRST Ship Lease Trust (FSL Trust) will distribute US$12.3 million or a distribution per unit (DPU) of 2.45 US cents to its unitholders for the first quarter ended March 31, 2009, FSL Trust Management Pte Ltd (FSLTM), the trustee-manager, said yesterday.

Mr Clausius: 'We have started to prepay some debt voluntarily, as a signal to our lenders...'

The DPU of 2.45 US cents represents a payout of approximately 73 per cent of the total distributable cash flow for the quarter.

This is lower than the DPU of 3.08 US cents in Q408 and 2.59 US cents in Q108, which were based on a 100 per cent payout ratio.

The cash retained in Q109 has been primarily applied towards a voluntary loan prepayment of US$4.0 million, it said.

The distribution re-investment scheme (DRS) will apply for the Q109 distribution.

Eligible unitholders will thus have the option to receive their distributions in the form of new units, cash, or a combination of both.

Philip Clausius, chief executive officer of FSLTM, said: 'Whilst the global shipping and capital market conditions remain challenging, FSL Trust's business continues to perform well with stable cash flows from the lease portfolio.'

Related links: Click here for First Ship's news release Financial statements DRS guide Notice of books closure

'We have started to prepay some debt voluntarily, as a signal to our lenders, and as reaffirmation of our commitment to be proactive and prudent in our capital management.

' The board has decided to apply the DRS this quarter in order to increase its scope of voluntary debt repayment.'

Of the total revolving credit facilities of US$515 million secured by FSL Trust, US$513 million have been utilised to acquire the additional 10 vessels post IPO.

FSLTM made a voluntary prepayment of US$4.0 million in Q109, which reduced the outstanding loan amount to US$509 million.

The loans are fully secured on all of FSL Trust's vessels. The facilities are provided on a floating rate basis.

FSL Trust said it has hedged its interest rate risk through natural hedges or interest rate swaps to fix the interest rates until the maturities of the facilities.

All vessels in FSL Trust's lease portfolio are fully financed and there is no committed capital expenditure that requires additional funding.

It said it does not have any loan refinancing needs until 2012. FSL Trust is also in compliance with all of its covenants under the credit facilities with its lenders.

It added that there is no immediate need to raise substantial capital.

For Q209, the trustee-manager is providing a DPU guidance of 2.45 US cents, which represents approximately 75 per cent of the projected distributable cash flow.

The cash retained, together with any proceeds from unitholders who have elected to receive their Q109 distributions in units under the DRS, will be principally used to reduce the outstanding loan balance.

FSL Trust units closed up two cents at 43 cents yesterday.