'Sell' Excel

High leverage on Excel Maritime Carriers' books led Cantor Fitzgerald's shipping analyst to downgrade the company's stock to "sell" on Wednesday.

Natasha Boyden said she estimates that the bulker owner is out of compliance with the requirements of its credit facility and may have to cut or halt its dividends.

The analyst also cut her earnings estimates for two other bulker owners as she reduced her spot rate assumptions for next year and said secondhand bulker values may have fallen by 50% to 60%.

$1.6bn in debt

For New York-listed Excel, approximately $1.6bn in debt "may significantly impact the company's financial flexibility and ability to navigate this tumultuous dry-bulk environment," Boyden said in a note to clients.

Plus, the analyst slashed her spot rate assumptions for next year, leading her to cut her estimate on Excel's earnings by 39.6% to $1.57 per share.

Boyden said that with 44% of the Stamatis Molaris-led company's operating days unfixed next year, the company could face depressed earnings if the current rate slump persists.

After taking over Quintana Maritime earlier this year, Athens-based Excel runs a fleet of 47 bulkers and has orders for eight capesize vessels.

Boyden's reduced spot rate estimates also led the New York analyst to slash her earnings estimates for Star Bulk Carriers and Genco Shipping & Trading.

She says that although letters of credit should return to the market by the first quarter of next year, rates still should be depressed throughout 2009.

"We now believe a rebound in dry-bulk rates, if and when it occurs, will likely be tempered by slackening demand for iron ore and other commodities," Boyden wrote.

Genco forecast cut

New York-listed Genco should see $5.01 in earnings per share next year, the analyst now estimates. Her prior forecast was $6.43.

Boyden cut her outlook on Athens-based Star Bulk from $1.51 per share to $1.24.