Baby Bonds: 8.18% Yield-To-Maturity From A Potentially Undervalued Shipper

Introduction
During the constant hunt for arbitrage opportunities, my team and I are reminded almost on a weekly basis that playing on the short side of things is tough and does not always yield the expected result. That being said, we're always pleased to find a product which does not immediately require a hedging reaction, but can instead be managed using the other related instruments as an indicator of what's to come.
Over the last few days we took note of an (perhaps dividend-inspired) upswing in Seaspan Corporation's (NYSE: SSW) preferred stock while their newly issued baby bond - SSWA - became weaker and started approaching levels of interest in terms of yield metrics.
In this article, we will go through all of the company's products which we keep an eye on and make our case for this new portfolio addition.
The Company As per Reuters' description of Seaspan Corporation (NYSE: SSW):
Seaspan Corporation, incorporated on May 3, 2005, is an independent charter owner and manager of containerships. The Company charters pursuant to long-term, fixed-rate time charters with various container liner companies. As of February 20, 2017, it had operated a fleet of 88 containerships and had entered into contracts for the purchase of an additional eight new building containerships.
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The Company is engaged in the operation and management of vessel, including maintaining the vessel, periodic dry-docking, cleaning and painting and performing work... Read more

Older articles featuring SSW: