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  • Roger S. Conrad

Still in Shipshape?

By Elliott H. Gue on Mar. 3, 2016

Teekay Tankers is among the world’s largest operators of midsize tankers. The company owns 22 Suezmax oil tankers, 14 Aframax ships, seven long-range product tankers (LR2) and 12 medium-range product tankers (MR).

In addition, Teekay Tankers owns a 50 percent interest in a VLCC and a 10 percent stake in Tanker Investments (Oslo: TIL), which specializes in lightering tankers used to transport crude oil between ships and from the shore to vessels docked offshore.

Teekay Tankers is a corporation, not a master limited partnership (MLP), and pays quarterly dividends. Late last year, the company adopted a new policy of disbursing 30 percent to 50 percent of its quarterly net income in dividends, subject to a minimum quarterly payout of $0.03 per share.

Besides paying dividends, Teekay Tankers will use its excess cash flow to pay down debt and has targeted a net debt-to-capitalization ratio of 40 percent to 45 percent this year.

The company’s progress in reducing leverage helped the firm to secure a $900 million credit facility in January at an attractive rate of LIBOR plus 200 basis points. This facility replaces two bridge loans that matured in January 2016 and a revolving credit line that comes due in late 2017, effectively pushing back several major debt repayments to 2021.

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    • Elliott H. Gue

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Roger S. Conrad

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor