AERM

Very good comparison of bond peers and tanker market fundamentals.

Performance Shipping Inc. employs its fleet on spot voyages, through pool arrangements, and on time charters.
As of January 13, 2026 the Company owns twelve tankers, comprising nine (9) Aframax tankers and two (2) Suezmax tankers currently operating on the water. In addition, the Company has one (1) newbuild LR1 tanker scheduled for delivery to the Company in early 2027.

(Bond tap followed early 2026 after the below).

Company in brief:

• Performance Shipping is a Greek tanker owner focused on the mid-size segment. The company currently owns 12 vessels, including two under construction, comprising two Suezmaxes, four Aframaxes, five LR2s, and one LR1.
• It is incorporated in the Marshall Islands and listed on Nasdaq under the ticker PSHG.
• In July 2025, the company issued a $100 million Senior Secured Bond to support fleet growth and renewal.

First acquisition announced:

• In October, the company announced the purchase of two Suezmax tankers at $75.4 million each (net of commission), with delivery expected between December 2025 and January 2026. Both vessels are scrubber-fitted and were built in Korea in 2019.
• On November 6, the company disclosed that it had secured three-year timecharters at $36,500 per day for both ships upon delivery.

3Q25 results:

• On November 25, the company reported its third-quarter results. EBITDA came in at $8.8 million versus our estimate of $11.1 million.
Revenues were broadly in line ($17.6 million vs. $17.9 million), but both G&A expenses ($2.6 million vs. $2.0 million) and vessel operating expenses ($6.1 million vs. $4.8 million) exceeded expectations. The higher OPEX reflects dry-docking costs expensed in the quarter, as well as additional expenses related to the delivery of two newbuilds.

Credit highlights:

• Performance Shipping maintains higher timecharter coverage than is typical in the tanker market. For the current fleet, we estimate coverage at 85% for 2025, 71% for 2026, and 59% for 2027, consistent with the company’s ~60% target. This high coverage materially lowers the implied rates required on open days to break even, both versus the fleet-wide cash breakeven and relative to historical norms.
• Even under a stress scenario where open-day rates fall to all-time-low one-year timecharter rates, credit metrics remain resilient:
NIBD/EBITDA stays between 2.9x and 3.7x in 2026–2028, rising to 5.4x in 2029 as more vessels are redelivered.
• The bond is secured by the company’s two oldest vessels, with an estimated 73% recovery at current values. Sale proceeds from these assets can only be used for reinvestment, where the replacement vessel becomes part of the collateral package, or for bond repayment.