Safe Bulkers is assessing its options for refinancing the €100 million bond, which matures in February 2027, as high freight rates in the international dry bulk market boost its profitability and create favourable conditions for the company to carry out its investment programme.
During a conference call to present its third-quarter results, the company’s chairman and chief executive, Polys Hajioannou, discussed the outlook for the freight market, its strategy for capitalising on high rates and investment in fleet renewal, while leaving open the possibility of further increasing returns to shareholders.
Of particular interest were his comments on new charter deals, with the company having secured a daily rate of $37,500 for a Capesize vessel, as well as its wait-and-see approach to the second-hand vessel market.
Options for the €100 million bond
Analysts focused their questions on the €100 million bond issued by Safe Bulkers in February 2022, with a fixed interest rate of 2.95% and a five-year term.
In response to a question on the subject, he explained that the financing had been an particularly attractive instrument when it was issued, although market conditions have since changed.
He said the company would assess whether renewing the bond financing made economic sense or whether it would be preferable to continue using conventional bank financing for its fleet.
He noted that Safe Bulkers’ average overall borrowing cost currently stands at around 5%, including bank margins. He also said bank margins were showing signs of easing, as increased liquidity in other shipping sectors, such as tankers and container ships, was leading to early loan repayments.
Management announced no final decision on the bond, making clear that its choice would depend on the cost and availability of financing.
Rates of $37,500 and the outlook for 2027
Management continues to see significant opportunities in the freight market, particularly in the large Capesize vessel segment. Polys Hajioannou disclosed that in September, when spot rates for Capesize vessels had reached $50,000 a day, the company secured a charter for a vessel that will be available in February 2027, at a daily rate of $37,500 for a term of 12 to 15 months.
In the Kamsarmax segment, where Safe Bulkers has a significant presence, management is currently opting to take advantage of higher rates in the short-term market, rather than tie up vessels in multi-year deals at lower rates.
According to Polys Hajioannou, modern, energy-efficient vessels can currently secure daily rates of $25,000 to $26,000 in the spot market, while offers for longer-term contracts are a little above $20,000.
For this reason, the company currently prefers to take advantage of spot market opportunities, without ruling out six-month to one-year deals when the rates on offer are considered attractive. Hajioannou said the strategy had delivered positive results in recent quarters.
Investment in new vessels and a wait-and-see approach
Fleet renewal remains a key priority for Safe Bulkers, which has eight newbuildings on order, with deliveries scheduled through to 2029.
In response to a question from Ilias Papazacharias, an analyst at Piraeus Securities, about how it would deploy its strong liquidity, Polys Hajioannou explained that a significant portion of available funds was earmarked for meeting the obligations arising from new vessel orders.
He stressed that the company wanted to avoid an excessive increase in borrowing in an environment of higher financing costs. It is also monitoring the second-hand vessel market for opportunities at valuations justified by market conditions.
The head of Safe Bulkers noted that newbuilding prices remain high, while available shipyard slots are now being pushed back to 2030 or even 2031.
In these circumstances, the company sees no need to bring forward new orders, having already secured vessels at prices significantly below current levels. “Sometimes in shipping, waiting is not the worst option,” Polys Hajioannou said.
Dividends and strong liquidity
Improved profitability also creates scope for higher returns of capital to shareholders. Polys Hajioannou noted that the dividend has increased alongside the improvement in the freight market and that, if strong spot market performance continues, the company will continue returning capital to shareholders.
For his part, Safe Bulkers chairman Loukas Barmparis said the company had distributed a total of $109 million in dividends on common shares since 2022, and had spent a further $78 million on share buybacks.
Management also highlighted the strengthening of its capital base following a €80.4 million private placement to institutional investors through the Athens Exchange in September.
At the end of September, the company had approximately $319 million in cash, deposits and restricted cash and a further $196 million in undrawn credit lines, bringing total liquidity and available financing to $515 million.
Financial results
Safe Bulkers reported net profit of $96.3 million for the first nine months of 2026, compared with $26.7 million in the same period a year earlier, while net revenues rose to $252.9 million from $203.2 million.
Adjusted EBITDA was $144.8 million, compared with $91 million. In the third quarter, net profit rose to $39 million from $17.8 million, with adjusted EBITDA of $53.8 million.
The company also announced an increase in its quarterly dividend to $0.09 per share, from $0.075 previously.