PACIFIC Shipping Trust (PST):

PACIFIC Shipping Trust (PST): While Distributable Income in the 2Q10 dipped marginally by 2% to US$6.52m, PST has pared its DPU by 20% YoY to 0.793 US cents (translating into payout ratio of about 70% compared to 90% a year ago) as it wanted to retain more cash to acquire new vessels. The DPU of 0.793 US cents represents a tax-free annualised yield of 10.9%. PST plans to acquire two new 180,000 DWT capesize bulk carriers, which cost US$61.6m each and are scheduled to be delivered in Sept 2011, with a 10-year charter with Jiangsu Shagang Group Co. The 10-year charter will add about US$194m to PST's contracted revenue, which will hit close to US$500m over the next 10 years. Notably, PST's current fleet portfolio only comprises 12 container vessels, hence these new acquisitions will enable PST to diversify into a new asset class and enlarge its base of charterers.

PST’s balance sheet remains healthy as all vessels have been financed on a long-term basis and that its loans do not have loan-to-value ratios on the vessels and top-up provisions.