We have a favorable debt profile with low debt servicing costs, no significant principal repayments until 2015 and no covenant concerns.
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Teekay Tankers trades on the New York Stock Exchange under the symbol “TNK”.
Teekay Tankers maximizes cash flow by tactically managing our mix of spot market and time-charter contracts and by participating in Teekay’s Aframax and Gemini Suezmax pools.
A commercial tonnage pool brings together any number of vessels from various pool partners (ship owners) to create a homogeneous fleet, which is commercially managed by a pool manager. This pool structure provides numerous advantages to the pool partners, including higher fleet utilization, cost efficiencies and more stable revenues.
At any given time, a portion of our fleet generally operates under short-term (1-3 years) time-charters. These charters generate fixed-rate cash flows that reduce downside risk to earnings.
Depending on spot tanker market outlook, we will adjust the percentage of fixed-rate charters up or down to either provide increased time-charter coverage when spot tanker rates are expected to be weak or increased spot market exposure when spot tanker rates are expected to be strong. When taking on new charters, we consider the market outlook and vary the length of our fixed-rate cover between one and three years as we see appropriate.
Over time, we expect to take advantage of vessel acquisition opportunities both through dropdowns from parent Teekay Corporation and acquisitions from third parties. We will only proceed when we expect acquisitions to be accretive to our cash available for distribution.
Teekay Tankers’ capital structure includes a combination of debt and equity. Our fixed-rate contracts provide stable cash flows which support our ongoing debt principal and interest obligations. Teekay Tankers has a favorable debt portfolio with minimal principal payments until 2015, low average cost of debt (~4%) and no financial ratio or hull covenant concerns.
With Teekay Corporation as its sponsor, Teekay Tankers has access to a network of strong customer relationships and the opportunity to benefit from participation in Teekay’s Aframax and Gemini Suezmax pools. (See Commercial Tonnage pools)Other benefits provided by Teekay Corporation include:
All of Teekay Tankers' vessels are double hull. As such, the single hull phase out has no direct impact on our fleet.
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