EGLE (2020 - Q4)

Greetings, and welcome to the Eagle Bulk Shipping Fourth Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, this conference call is being recorded. I would now like to hand the call over to Gary Vogel, Chief Executive Officer; and Frank De Costanzo, Chief Financial Officer of Eagle Bulk Shipping. Mr. Vogel, you may begin. Gary Vog

Thank you, and good morning. I'd like to welcome everyone to Eagle Bulk's fourth quarter 2020 earnings call. To supplement our remarks today, I would encourage participants to access a slide presentation that is available on our website at eagleships.com. Please note that part of our discussion today will include forward-looking statements. These statements are not guarantees of future performance and are inherently subject to risks and uncertainties. You should not place undue reliance on these forward-looking statements. Please refer to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties that may have a direct bearing on our operating results, our performance and our financial condition. Our discussion today also includes certain non-GAAP financial measures including EBITDA, adjusted EBITDA and TCE. Please refer to the appendix in the presentation and our earnings release filed with the Securities and Exchange Commission for more information concerning non-GAAP financial measures and a reconciliation to the most comparable GAAP financial measures. Before we begin our presentation, I'd like to take this opportunity to once again thank our crews for going above and beyond in dealing with all of the challenges they have faced as a result of the restrictions and disruptions caused by the outbreak of COVID-19 last year. We're pleased to see the water community paying attention to seafarer welfare and understanding their importance to global commerce, with strong advocates for all seafarers and our proud signatories to The Neptune Declaration, which seeks to improve their standing. We have and will continue to make seafarer welfare a priority at Eagle with a constant goal of continuing to maintain zero seafarers working beyond their contractual employment periods. Please turn to Slide 5. On the back of an improving macroeconomic landscape, freight environment and overall capital markets, I'm pleased to report that we raised $25 million in growth equity this past December. We immediately put this money to work and acquired a total of 7 vessels at what we consider to be very attractive levels. The total purchase price consideration is about $86 million in cash and 542,000 Eagle shares. These acquisitions are comprised of 4 modern high-spec scrubber-fitted SDARI-64 Ultramaxes built at Chengxi Shipyard; and three 2011 built CROWN-58 Supramaxes built to Dayang shipyard. We've taken delivery of 2 of the vessels thus far, with the remaining expected to deliver between March and May. Please turn to Slide 6. Pro forma for our acquisitions, our fleet currently totals 52 ships, all within the Supramax/Ultramax segment. 45 of our vessels or 87% of our fleet are fitted with scrubbers, giving us exposure to the recently widening fuel spreads. Since starting to execute on our fleet renewal and growth initiative, we've now turned over more than half our fleet, acquiring 27 vessels and selling 19. These sale and purchase transactions have vastly improved our fleet makeup in terms of age, size and emissions. Please turn to Slide 7. Our markets continued to trade up during the fourth quarter with BSI ending December at $11,424 per day and averaging $10,749 for the full period, representing an 8% increase as compared to the prior quarter. We believe the improving trend in markets is reflective of the continued recovery in global GDP, post the economic shock caused by COVID-19 as well as a normalization in certain drybulk flows. In particular, the fourth quarter was supported by a number of factors, including increased demand for agricultural products as China continued to build back their pig population; increased purchase of construction materials, such as steel, cement, clinker and other minor bulks; and increased thermal coal shipments as China increased purchases of Indonesian coal on the back of greater domestic demand and restrictions on Australian imports; and finally, India also saw a normalization of coal demand to pre-COVID levels. As depicted in the chart, Eagle generated a net TCE for the fourth quarter of $11,190 per day, up 16% quarter-on-quarter, representing a beat of roughly $1,000 compared to market. As we've discussed in previous calls, it's challenging to catch and beat a rapidly rising market, as a percentage of days are fixed in advance and where voyages average about 45 days in duration. In addition, given the weakness in the markets back in early 2020 and the lack of visibility due to COVID-19, we increased our hedge position for the second half of 2020 in order to provide us with appropriate downside protection. While this negatively affected our performance for the quarter, we believe it was the prudent thing to do and was more than offset by the positive contribution from our platform methodology as well as operating scrubbers on the majority of our fleet. It's also worth noting that as of the end of 2020, those defensive hedges were completely closed. For the full year 2020, our TCE outperformance was $1,964 per ship per day, equating to approximately $37 million in incremental annual cash flow based our current fleet size. We entered Q1 well positioned with roughly 70% of our fleet next open in the Atlantic, where the market has been particularly strong. The BSI, which was around $11,400 at the start of the year, has rallied since. As of today, we have fixed about 93% of our available days for the first quarter at a net TCE of $15,085 per day. Please turn to Slide 8. Turning back to the fourth quarter, the top-line growth we experienced contributed to an improved operating performance for the period, reflected by $22 million of EBITDA, the highest level in 2 years. With that, I'd now like to turn the call over to Frank, who will review our financial performance.

Thank you, Gary. Please turn to Slide 10 for a summary of our fourth quarter and full year 2020 financial results. The improvement in the chartering market drove top-line growth in Q4, with revenue net of both voyage and charter hire expenses, totaling $50.1 million, an increase of 15% from the prior quarter. In Q4, our TCE came in at $11,190, which is $961 above the adjusted net BSI. For the year, revenue, net of both voyage and charter hire expenses, was $164.3 million, remaining relatively flat as compared to 2019. For the full year 2020, our TCE came in at $9,710, which is $1,964 above the adjusted net BSI and $675 a day lower than prior year. We reported a net income of $115,000 for the fourth quarter versus a net loss of $11.2 million in the third quarter. Basic and diluted earnings per share for the fourth quarter were $0.01 versus a loss per share of $1.09 for the third quarter of 2020. Adjusted EBITDA improved in Q4, coming in at $22 million as compared to $11.5 million in the prior quarter and $9.8 million in the fourth quarter of 2019. Adjusted EBITDA for the full year 2020 came in at $54.1 million as compared to $48.7 million in 2019. Let's now turn to Slide 11 for an overview of our balance sheet and liquidity. Throughout the course of the pandemic, we maintained a strong liquidity position. Total cash, inclusive of $18.9 million of restricted cash, was $88.8 million at December 31, 2020, representing an increase of $3.6 million as compared to the end of the third quarter. The increase in cash was primarily a result of proceeds from the sale of 3 vessels, proceeds raised from the equity issuance in December 2020 and cash provided by operating activities, offset in part by the principal payments on the Norwegian Bond and the Ultraco Debt, along with the repayment of the Ultraco Debt Facility revolver, CapEx spending and deposits paid on the Oslo Eagle and Helsinki Eagle acquisitions. Total liquidity increased to $143.8 million at the end of Q4. Liquidity is comprised of total cash of $88.8 million and $55 million of the undrawn availability on the Ultraco revolving credit facility. Total gross debt, excluding debt issuance costs at the end of Q4, were $475.6 million, a decrease of $46.8 million from the prior quarter. The decrease is due to the $35 million we repaid on the Ultraco revolving credit facility, a principal repayment of $7.8 million on the Ultraco Debt Facility and a principal payment of $4 million on Norwegian Bond. As Gary mentioned earlier, we have acquired 7 ships over the past couple of months. The Oslo Eagle, which we took delivery of in January, was slotted into the Shipco silo and was fully funded by restricted cash on hand. The remaining 6 vessels are to be funded by a combination of equity issued to the sellers, cash on hand, keeping in mind, we had $25 million of which we raised in December. Looking ahead, we may add debt at some point in the future. Please now turn to Slide 12 for an overview of our cash flow from operations for the fourth quarter of 2020. Net cash provided by operating activities was $14.9 million in Q4, a $2.1 million increase from $12.8 million in net cash provided by operating activities in Q3 2020. Cash flow was strong in the quarter on improving charter hire rates and our strong commercial platform performance. For the full year 2020, cash flows provided by operating activities were $12.6 million. Please now turn to Slide 13 for the Q4 and year-to-date 2020 cash walk. The chart at the top of the slide lays out the changes in the company's cash balances during Q4. Revenue and operating expenditures are a simple look at the operations. The net of these 2 large bars at the left is positive $21 million, which is very close to our adjusted EBITDA number. We incurred $3 million of drydocking expenses and $3 million of CapEx expenses in the quarter. The $16 million of vessel S&P represents the proceeds from the sale of 4 vessels, less deposits paid for 2 acquired vessels. We repaid the remaining $35 million drawn from our Ultraco revolving credit facility, raised $24 million in net proceeds from the issuance of equity in December, and a total of $21 million represents the debt principal and interest paid in the quarter. The chart at the bottom half of the slide displays the changes in the company's cash for the full year 2020. Let's now review Slide 14 for our cash breakeven per ship per day. Cash breakeven per ship per day came in at $11,553 for the fourth quarter. Vessel expenses, or OpEx, came in at $4,718 per ship per day in Q4, $66 lower than prior quarter. The decrease in OpEx per day was primarily a result of the decrease in the number of crew changes in the quarter. Drydocking came in at $784 per ship per day in Q4, $152 lower than prior quarter. The decrease was a result of a decrease in the number of drydocks. Cash G&A came in at $1,824 per ship per day in Q4, up $228 from Q3. The increase was, in part, caused by a decrease in owned days due to the sale of 4 vessels. It is worth noting that our G&A per ship calculation is based on our owned vessels, whereas we operate a larger fleet, including our chartered-in tonnage. If we were to include the chartered-in days in our calculation, G&A per ship per day would decrease by about $200. Cash interest expense came in at $1,555 per ship per day in Q4, which was slightly lower quarter-over-quarter driven by decreases in our total outstanding debt and lower interest rates. Cash debt principal payments came in at $2,673 per ship per day in Q4, $955 higher than the prior quarter. The increase is attributable to amortization repayments on our Norwegian Bond Debt, which are paid semi-annually in Q2 and Q4. This concludes my comments. I will now turn the call back to Gary.

Thank you, Frank. Please turn to Slide 16. Here, we depict the BSI for the last 5 calendar years plus 2021 year-to-date, which is represented by the dark blue line. I believe a picture's worth a thousand words and the velocity of the recent increase, as well as the levels, are quite demonstrative. Year-to-date, the BSI is averaging approximately $13,800 with current spot above $20,000. And I think it's particularly noteworthy that the markets exhibited such strength during Q1, a period which typically represents a seasonal low due to, among other things, elevated newbuilding deliveries that tend to occur in January and the Lunar New Year holiday in February. In recent weeks, we've been able to book strong fixtures across most regions to transport a diverse mix of cargoes, including fertilizer from the Baltic, sugar and grains from Brazil, pet coke from the U.S. Gulf and manganese ore from West Africa, among others, all at levels not seen for many years. Please turn to Slide 17. Looking at rates from a more historical perspective, the BSI is now trading at a 10-year high. Although 2020 demand and rates were severely impacted by COVID-19, we believe we may be back on track in terms of a long-term cyclical recovery, which began to take shape back in 2016. Given improving supply side fundamentals and an expected further recovery in global GDP and drybulk demand, notwithstanding inherent volatility, we believe rates can continue to remain strong for the foreseeable future. We typically don't discuss asset prices, but I think it's worthwhile to note that, if rates remain strong or increase even further, we could see a material upswing to values. To put this into context, a 5-year old Ultramax today is worth around $17 million, while in 2010, a 5-year old Supramax was valued at over $27 million. Please turn to Slide 18. Fuel prices, as well as spreads between high sulfur fuel oil and very low sulfur fuel oil, came under significant pressure last year due to the demand shock caused by COVID-19 as well as the OPEC Russian oil price war. Notwithstanding extreme volatility, market fuel spreads averaged roughly $100 per ton for calendar 2020. And for Eagle, given the hedges we put in place in early 2020, we were able to realize an average fuel spread of approximately $150 for the year, helping us to generate over $26 million in savings from operating scrubbers, basis the first 12 months of operation. It's also worth noting that we closed out all of our 2021 fuel spread hedges totaling 72,000 tons during last year at a weighted average price of around $105. This level is now well below 2021's current quoted spread of approximately $120. We did so with a view that with the world coming back online and oil demand normalizing, there will be continued upward pressure to underlying fuel prices and spreads, both of which will be supportive towards our earnings capability on a go-forward basis. Please turn to Slide 19. On the supply side, given visibility, not much has changed since our last update in November and fundamentals remain positive. Net supply growth decreased in Q4. A total of 88 drybulk newbuilding vessels were delivered during the period, down 15% quarter-on-quarter. And offsetting this, a total of 38 vessels were scrapped during the same period. In terms of forward supply growth, the overall drybulk order book stands at just 6%, a 25-year low. And when looking at Ultramax vessels as a percentage of the broader Handymax fleet, the order book is even lower at just around 5%. For 2021, drybulk net fleet growth is expected to come in at 2.6%, assuming scrap of roughly 10 million deadweight tons, which is down about 1/3 compared to last year, primarily as a result of a stronger rate environment. A total of 221 drybulk ships were ordered in 2020. It's interesting to note that over the past 25 years, there have only been 3 years, which saw lower ordering, 1998, 2001 and 2016. If the freight market stays at elevated levels, we would expect ordering to pick up somewhat. However, we do not believe it will be material given relative pricing for second-hand tonnage, as well as uncertainties surrounding decarbonization regulations as well as more restrictive access to financing. Please turn to Slide 20. Global growth expectations have been revised upwards since our last earnings call, reflecting a normalization in activity, thanks to the expected impact of vaccines and increased stimulus. The IMF is now estimating global GDP contracted by 3.5% in 2020 and is projecting a recovery of 5.5% in 2021. Please turn to Slide 21. Drybulk demand growth has been revised significantly upward as well with 2020 now estimated to have contracted by 1.9% as compared to a decrease of 4.5%, which was being forecast back in July. For 2021, forecasts are indicating trade demand growth of a positive 3.7% as compared to last year. Notwithstanding uncertainty, we remain optimistic for the continued normalization of trade demand and see our market being a beneficiary from stimulus measures, which are already being put in place around the globe. With that, I would now like to turn the call over to the operator and answer any questions you may have. Operator?

[Operator Instructions]. Our first question comes from Omar Nokta with Clarksons Platou Securities.

Good commentary, I think, on the market and some of the macro factors underlying things. And clearly, rates are quite strong. I wanted to ask you, how do you feel about where your fleet is today, and it's a question that you get constantly, but you've added 7 ships at what we -- when we look back in hindsight are very well timed. And you also monetized some of your older ships in keeping with your fleet renewal plans. What's your appetite today when you think about the outlook for the purchases? Do you feel the return still makes sense? And also, when it comes to selling older ships, do you still have an interest in doing that?

Yes. Thanks, Omar. I mean, I think the answer is we still have appetite. I think we -- while we have a general goal of fleet renewal and growth, each acquisition has to be measured and evaluated given market dynamics, ability to raise capital or cash on the balance sheet and also same with divesting of assets. So we now have 3 vessels left that are over 15 years old. I mean, they clearly are on the sales -- potential sales list for us, always they have been. But fair value for those ships, in our opinion, is higher than where the market is today given the increase. I mean, I can tell you that just this morning we traded [Q2 to 4] on the Baltic Supramax Index, the BSI at $16,250. That's up $6,000 for those 3 quarters from just January. And so, that's a meaningful cash flow on any given ship relative to the index. And so that has to be taken into account for the asset value in terms of selling. So while our goal ultimately will be -- or we will sell those ships, it has to be at the right time, given the economics. And if we can garner the cash flow by operating them for longer and then sell them, and that's what we'll do. And same in terms of acquisitions.

And with kind of maybe sort of that theme, I guess, with Supramax/Ultramax rates being over 20,000 today, especially this early as you mentioned in your opening remarks, things were pretty solid. Have you been approached into entering into time charters of, say, a year, has it gone there yet? Do you see yourselves wanting to put vessels on contract? Or with your freight trading, do you see yourself being more of the guys chartering in?

So first of all, if I may, just slight correction, we just got the index in during the call. So we're now just over 21,000.

You're right.

No worries, no worries, Tongue and cheek. But the answer is we have been approached, and we always value that relative to the curve. All things being equal, we prefer to keep control of our assets and trade them for the reasons you mentioned, right? The goal to outperform, and we're able to hedge cash flows using derivatives. Having said that, given the dynamics in the market, there are operators who have positions they need to cover. And given the velocity of the change in the market, are there to pay up significantly for a vessel on period, whether it's 3 to 5 or 7 to 9 months and even longer. And if we can get significant premium to what we call par value on the curve, we will relet ships. But you've heard me talk about it before when you relet a vessel, you give away an option at the end, even if it's just a 2, 3 month option in terms of redelivery window. And so given that we can trade the ship ourselves, we need to be paid for that when we do our internal calculations in order to relet a vessel. So the answer is yes, but we have multiple ways to lock in cash flows as we go forward, and reletting ships is not the number one for us.

Got it. That's pretty clear. And maybe just, sorry, one final one, and maybe for Frank. You talked a bit about the financing of the acquisitions you guys have done. I wanted to ask how do you think the appetite is for the Supramaxes you acquired, the 2011s. They're not equal design, but they are sister ships to what you have. Do you see them being financed with traditional bank debt or other means? Or do you prefer to keep them as a sort of unencumbered cash purchases?

Omar, thanks for the question. Yes, the appetite for those ships in the bank market is good. And we are considering putting on modest leverage similar to what we've done in the past on the Ultraco facility. So good appetite, and we're looking at doing something.

Our next question comes from Randy Giveans with Jefferies.

So yes, obviously, I appreciate the quarter-to-date rate guidance, which, as you mentioned, well above benchmarks, likely at a 9-year high, I think you said in your press release. So can you break this out by Ultramax and Supramax? And then, also, is there something maybe unique about this quarter in your operations that's somehow increasing the first quarter numbers that might result in lower second quarter numbers? Or is just purely a reflection of the state of the market and kind of your normal trading operations?

Thanks for that. So let me take it. First of all, we don't break out Ultramax from Supramax. And the reason is, is that we trade our fleet as one homogeneous and arbitrage between vessels and cargoes. And we think it kind of gives the wrong picture if there's volatility between the two. So in the back of our earnings deck, we provide in the appendix a guide to relative earnings values of different size ships and so you can break it out yourself in terms of what our overall fleet is. With our recent acquisitions, we've actually now gotten to a point where it's just over 50% of our ships pro forma for the deliveries will be Ultramaxes. So that's a huge milestone for us, given that 4 years ago, we were 100% Supramax player. In terms of this quarter, the answer is there's always going to be volatility. Our market is such that backhaul trades, our ships don't typically balance from, let's say, the Far East to Brazil and back. And because of that, there's considerable evolve between a backhaul trade of, let's say, $4,000, $5,000 a day and today outbound was going to be $35,000, even $40,000. And so because of that, you can get volatility depending on how many ships are backhaul and front haul. Having said that, I can tell you that our quarter is not -- this -- the numbers in the guidance is not based on a predominant amount of front haul business. So I would say this is more about the business methodology. But having a majority of our fleet in the Atlantic for this upturn in the market has definitely been helpful, and we've been able to capture it, but it hasn't been done by sending all these ships out. At the moment, our balance remains similar to where we entered the quarter.

Got it. Okay. Yes, just making sure there wasn't like a huge surge now and then you have no more availability for the next month or so. But it sounds like not the case. And then, you ended fourth quarter with, like you said, $89 million in cash. Another, whatever it was, $50 million in your undrawn -- $55 million in your undrawn availability. You should obviously be cash flow positive here in the coming quarters, pretty manageable debt amort, shares trading, close to NAV. So all that being said, what are your plans for this free cash, assuming rates stay relatively firm here in the coming quarters. Is it just keeping the cash on the balance sheet? Repaying debt, and then you paid down on your revolver in the past. Some kind of repurchases? Secondhand acquisitions? How are you going to balance these plethora of options?

Well, I appreciate the question, and I appreciate that we're in a situation where you have the ability to ask the question, right, given rates. But having said that, we just acquired 7 ships, as you pointed out, and it's early days into the quarter. So I think we'd like to get deliveries on these ships. As Frank mentioned, we're looking at potentially putting debt on some or all of the acquisitions and then see how things play out and what the intention will be given opportunities in the market, paying down debt, things like that. So it's still early days, but it's definitely on our radar. And we intend to turn to it, given hopefully that this market continues to show strength as the forward curve indicates it does.

And your next question comes from Greg Lewis with BTIG.

Gary, I wanted to touch a little bit on some of your comments you made around the strengths in the curve and maintaining flexibility. At least, for us, from our point of view, the market has been much stronger than we expected. There's -- and that's helped the next few quarters of the curve. While I understand why you want to maintain exposure to your vessels and not just turn over the keys to other operators, how do you think about the strengths in the curve in, say, the back half of the year, $13,000, $14,000, I get it's not as high as today, but it's still nothing to slow chow. Should we think about the potential for the company to take advantage of that and maybe just lock in a little bit of coverage around the derivatives market, realizing, not really sure how you can talk about that, but any kind of color around that, I think, would be helpful?

Yes, absolutely. I mean, first of all, the answer is yes. You can expect us to take advantage of opportunities and the fact that the strip, as we call it, is trading over $16,000, and I mentioned we traded that this morning. So locking in certain cash flow, as we've said, until further notice. Consider us a spot player, and our goal is to outperform the spot index. But as we said last year for defensive reasons, we communicated that we put on a significant number of hedges, downside protection, given the uncertainty around COVID. And similarly, if we get to a point where we want to communicate that we've done something substantial in terms of locking in cash flows. So even though at this point, we're not going to say that, rest assured, we are managing the fleet in such a way that we think we can take advantage of strength and then volatility as well. So we're quite aware of what $16,000 means over the back 3 quarters of this year from a company standpoint and cash flow, and we're going to act accordingly.

Okay. Great. Great. And then just another one around scrubbers, and it's kind of the same question asked a different way. I mean we're bullish on the outlook for scrubbers in the press release last night, you kind of -- I think in Frank's comments, you touched on it. I mean, we're well up off the bottom in spreads between high sulfur and low sulfur fuel. I guess, a couple of questions. And you mentioned that the fleet is -- I guess, I'll ask it this way, are there different markets where scrubber utilization would just be better, i.e., is there something around whether it's the Atlantic or the Pacific, where vessels in certain markets just have a better chance to run utilization, whether it's because of the distances or because of -- as we think about some ports aren't letting scrubbers be used, is there any way to think about -- is there ideal better location than others for scrubber vessels?

Yes. Absolutely. So first thing I would do is, for the most part, you can discount what ports allow scrubbers to be used because our vessels have low consumption when import. The vast majority of consumption is at sea. And so, the way to look at it is really the percentage of sea days as compared to a total voyage or pulling back how many days of the year can you spend at sea. So ships with scrubbers gaining that benefit are better off spending time at sea, which typically is actually cross trading Atlantic to Pacific and Pacific to Atlantic, right? Because all things being equal, load and discharge, number of days to load and discharge a ship, the more days you put in the middle at sea, the better it is for scrubbers. So we find our ships with scrubbers tend to be doing those long-haul trades. Of course, there are other dynamics involved, but that's the main driver of trying to maximize the days at sea. It's really no different than when you have a ship, which is heavy on consumption and not very economical, you do the opposite. You find business where they ship spends more time in port and it's not as noticeable as the consumption at sea.

[Operator Instructions]. Our next question comes from Liam Burke with B. Riley.

Gary, you talked about a strong seasonally slow first -- strong -- traditionally seasonally slow first quarter. And then, do you anticipate the traditional patterns of the subsequent quarters to continue with the macro, even though you've had an unusually strong first quarter?

Yes. I think, I would separate it out in the sense that there's a number of reasons. The first quarter has started off strong. We had the fourth quarter, China, record 100 million tons of soybeans. But the real -- the standout here, especially compared to the last few years with the trade war and tariffs is that the U.S. doubled its exports from 18 million to 36 million tons, and the majority of that moves on the U.S. harvest, which is fourth quarter and carrying into the first quarter. We're still loading beans to China now. And then you've had a cold winter and more coal moving and -- into China, so that's been helpful. And also, the Lunar New Year, there was much less travel. So China really kind of pushed through it as opposed to the normal slowdown. Having said that, we don't really see a change to typically the strength coming into the second quarter, is really on the Brazilian soybean movements. And although the harvest has started a bit late, it's ramped up pretty significantly. And expectation is we're already loading and that, that's going to be strong as well as China is -- continues to rebuild the pig population. So we don't see anything on the horizon that would indicate that things are out of whack for Q2 because of a strong Q1.

Great. And Frank, I know you have time on the senior secured 2022s. But are you looking now possibly reducing your interest rate, understanding it's not due for a bid here?

Yes, sure. We are looking. And as the market improves, our options improve also. So we're looking across a broad spectrum of options, bank debt, a New Norwegian Bond and other instruments to see and find the ideal mix, and we do expect that it will improve our picture going forward once we do refi.

Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Gary Vogel for any further remarks.

Thank you, operator. We have nothing further. So I'd just like to thank everyone for joining us today and wish everyone a good day.

Thank you. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.