Good day, ladies and gentlemen and welcome to the Global Ship Lease Q3 2014 Earnings Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, this conference is being recorded. And I would now like to introduce our host for today’s conference, Ian Webber, Chief Executive Officer of Global Ship Lease. Please go ahead sir.

Thank you very much. Good morning, everybody and thank you for joining us today. As ever you’ve been able to have a look at the earnings release that we issued earlier this morning, and been able to access the slides via our Web site that accompany the call. Slides one and two of the presentation reminds you that the call today may include forward-looking statements that are based on current expectations and assumptions and are by their nature, inherently uncertain and outside of the Company’s control. Actual results may differ materially from these forward-looking statements due to many factors, including those described in the Safe Harbor section of the slide presentation. We also draw your attention to the Risk Factors section of most recent Annual Report filed on Form 20-F, which you can obtain via our Web site or via the SEC Web site. All of our statements are qualified by these and other disclosures in our reports filed with the SEC. We do not undertake any duty to update forward-looking statements. For reconciliations of the non-GAAP financial measures to which we will refer during this call to the most directly comparable measure calculated and presented in accordance with GAAP, you should refer to the earnings release that we issued this morning. I’ll start today’s call by reviewing the third quarter highlights and we’ll then provide an overview of our fleet and our growth strategy. After that, I’ll offer some comments on the container shipping industry, as well as the market opportunities that exist for acquisitions in the space. Following that, I’ll turn the call over to Susan for her commentary on our financials. Then after brief concluding remarks, we would be pleased to take your questions. Slide 3, shows the highlights for the third quarter. The third quarter of…

Thanks Ian. Please turn to Slide 14 for our summary of our financial results for the three months ended September 30, 2014. We generated revenue of $34.2 million during the third quarter down 1.9 million from revenue of $36.1 million in the comparative period in 2013. The decline is due mainly to reduce revenue income full vessels following three year charter expansions at a lower daily rate of $15,300 compared to $18,465 previously; these were effective February 1st, this year. And from 16 days idle time at the start of the quarter for Ville d’Orion until the commencement of the new charter with Sea Consortium on July 17th of this year and together we’re 29 days off hire for two planned drydockings. These 45 day plus five days of unplanned off hire during the three months ended September 30th, resulted in the utilization rate of 96.8%. In the comparable period for 2013 there was no off hire, so utilization of 100%. Vessel operating expenses were $12.5 million for the three months period with an average cost per ownership day in the third quarter of $7,984 compared to $7,127 for the same period in 2013 up $857 or 12%. The increase was primarily related to $0.4 million repositioning cost for Ville d’Orion prior to commencement of a new charter which is equivalent to $261 in the quarter across the fleet and to higher crew costs. Interest expense for the three months ended September 30, 2014 was $11.9 million including interest and amortization of deferred financing costs and regional issue discount on the notes. Interest on the $45 million Series A preferred shares until they were redeemed and the commitment fee on the Company’s undrawn $40 million revolving credit facility. In the prior year period interest expense was $4.7 million on borrowings…

Thank you. Before we move on your question, I’d like to use Slide 17 to briefly summarize core strengths and strategy for creating value for our shareholders. First sale and leaseback of the OOCL Tianjin marks a major set forward for Global Ship Lease adding up to $41 million of contracted revenue and generating approximately $9.4 million in annual EBITDA in each of the next three years. We diversify our charter of portfolio with this 36 months to 39 months charter to a top-tier container liner company OOCL were delighted to have established a relationship with them. Second, excluding the two 4,100 TEU vessels. Our fleet is fully contracted through to late 2017 with contracted revenue of approximately $900 million and a weighted average remaining contract duration of 6.5 years as of the delivery of the Tianjin this week. This strong contracted coverage and our forward visibility on cash flows insulates us from market volatility and puts us in a strong position to pursue additional growth opportunities that will support the payment of a dividend in due course. Third, we benefit from a strong and stable capital structure with no refinancing requirements until 2019 when our secured notes for due, incidentally call in April of 2016. And we no longer have any of the restrictive maintenance covenants particularly loan-to-value that prevented us from growing in the past. Additionally we were able to successfully replace short-term debts represented by the old Series A preferred shares with new perpetual preferred shares the Series B shares that are treated as equity without any dilution to our common shareholders. Finally even after funding the OOCL transaction we have capacity to continue to execute our growth strategy. In the current market conditions opportunities exist to make mutually accretive charter-attached acquisitions while asset values are still…

Thank you. [Operator Instruction]. Our first question comes from Mark Suarez with Euro Pacific Capital. Your line is now open.

Ian maybe we can just talk about your acquisition strategy for a second. My understanding obviously you talked it in the past the strategy is to continue to take ownership of charter-attached vessels as you’ve done with the sales leaseback transaction. Now looking at the market right now where we stand especially given that cascading effect from the post Panamax to the Panamax in the sub Panamax segments. Do you now have a preference as to what sort of vessel size segment you’re willing to consider little bit more closely as you engage in your growth strategy.

Well our view does evolve at the margins as we said previously that yes mid-size is smaller so the 7,000, 7,500 and below. But we’ve done a lot of work during this year on the 8,000, 8,100 segments and we now consider as the industry is generally upsized but that category of vessel is mid-size accounted mid-size in smaller, and we’ve included that slide in the presentation sharing how those vessels are being deployed in ever increasing numbers of tradelanes throughout the world and we think that they since at the top of the cascade and we will have a long term future. And you were right we continue to focus on charter attached deals whether they are sale and leaseback transactions, which is the most obvious one for us to look at replicating the sort of deal that we have just executed or whether their existing vessels with existing charters, they are less prevalent. And with continuing pressure on the sector, the asset values remain low and therefore provide a good counter cynical investment opportunity and operators remain push for liquidity which may lead to an increased level of activity in sale and leaseback transactions as they off load some of their ships to generate cash.

So do you think sales leaseback will continue to be sort of the main strategy going forward and looking at more over the 12 to 18 months or?

Yes it will.

And then I think you also touched when you talked about the market environment, we have seen an improvement in Panamax rate with accelerated scrapping. And now as you look into this Panamax category, are you beginning to see that thing trend in terms of premature scrapping if you will. Is that something that you think is taking hold now vis-à-vis the last 6 months to 12 months?

Yes that’s some of that mark, its mainly for I guess on sort of Panamax segments as we’ve said it’s great to see that spot rates have moved up, we are concerned that the improvement is not sustainable as we move into the slow season and indeed there are some signs that the spot market rate is softening. But irrespective it’s good to see rates off the floor.

And then just lastly on the daily vessel operating expenses. I know you had some one-off repositioning cost. But as we take a look at 2015, should we think about a 7,500 to 7,700 sort of OpEx range as a reasonable run rate?

Well I would look at historic performance for us and then the long-term inflation of chip operating cost is 2% to 3% a year.

Thank you. Our next question comes from Andrew Casella with Imperial Capital. Your line is now open.

I guess first just a housekeeping item. Just on the dividend payment ability, when we look at the bond you guys can pay $7.5 million general carve out. And then you said the basket was increased by the proceeds from the recent preferred sale. And then you said it’s all subject to a 2.25 fixed charge coverage test. Just curious is that something you’ll have to achieve before you can payout any dividend or is that just to get access to the incremental basket that was generated from the preferred capital raise?

That is indeed a test and that was to access the incremental basket, the 7.5 million general restricted payment basket is fully available to us right now.

And then when you guys kind of think about capital deployment strategy and also the fact that your acquisition was funded all with cash on hand or equity. What kind of other financing mechanisms are you thinking about? Why didn’t you use leverage in this case? I know you have access to the preferred market also the tack-on with the 10% notes but also the term loan market. I mean if you could just kind of take us through why not leverage some of these transactions and potentially get to that 2.25 test by accelerating acquisitions faster?

Indeed, and I did say I think in my prepared remarks that we continue to look at alternate sources of capital to improve our immediate liquidity. You are right we could do a tack-on to the bond, we could raise additional perpetual preferred, we could look at putting regular bank debt on an individual asset and we could look at equity. But I’ll say now we would now look at raising any equity capital based on today’s valuations. The Tianjin, could we leverage on her? Maybe. Did we meet you at the time? No. Can we in the future? Yes. So we’ve maintained flexibility and the amount of leverage which was an almost 10 year old vessel with a three year charter. It wouldn’t be massive but it would contribute to driving up the internal rate of return. So that’s something that we’re actively looking at. And clearly would provide us with incremental investment capacity. So lots of potential opportunities for us to supplement the immediate liquidity that we have today.

And then another question just one of the trends that we’re seeing in shipping, outside the containership sector is definitely towards consolidation. How do you kind of see global ship lease in that respect? And also to the extent you see some of these charter-attached vessels coming for sales. Do you see any larger deals that are potentially coming down the pipeline, or how are you kind of thinking the opportunities going forward and the potential to do something a little more transformative that might be a larger fleet acquisition versus a single vessel?

That’s a huge question, clearly that’s sort of call for a transaction or participation in for example a significant new building program would be transformative. And we keep an open mind for those sorts of things. I mean clearly we wouldn’t want to talk about anything specific but we’re aware of the opportunities that could exist. In the mean time and alongside we focus on our core strategy of developing Global Ship Lease itself whilst keeping our eyes open for other opportunities which might accelerate progress.

And just my final question, you said the dividend payment policy is subject to kind of the conditions at the time. But I guess just generally speaking should we kind of look to other sort of yield curves as potentially what type of dividend payment could be implemented like a ship demand or ocean yield, just kind of general thoughts there.

The first thing that we need to do is get ourselves in a position where we can access that basket, because that provides us with the sort of funds if you want. And this isn’t the cash sitting in our balance sheet that we can only access; it’s a notional amount that the bond holders will allow us to pay away a dividend. But to access that we need to pass on a sustainable basis this fixed charge coverage ratio test. And we need to grow to be able to do that. So our immediate focus is on being able to access that basket. I’d love to be able to give you a figure and the time table and all the rest of it on a dividend and so on. But I think that’s premature. That said looking at the sorts of yields that competitors they do pay dividends. That would be an important factor in the Board’s consideration of a dividend level at the right time.

Thank you. Our next question comes from John Race with DRZ. Your line is now open.

Can you comment upon whether or not you’re looking at what for example Costamar is being doing which is aligning with private equity is a source of capital with which to make acquisitions and then even further the possibility of dropping down assets into an MLP? Have you investigated any of that?

Yes we have.

Is that available, is that potential, are those discussions available to you?

We believe those discussions would be available to us as I sort of previously said on to the last questioner. We can’t comment on anything specific. But we’ve seen what Costamar have don; we’ve seen what Seaspan has done; we’ve seen what private ship owners have done teaming up with major capital providers. Would we like to be able to access a much bigger pot of money to be able to play in the sector? Yes we would even if we had a relatively small share of OpEx. Will it help us get to our objective of creating shareholder value? Yes, probably. So we certainly don’t rule that out. As to MLPs that we need to look more closely as market structure, we were originally created as a sort of synthetic MLP, it would be great to be able to return to that sort of the profile. But as we said on the call and as I’ve indicated in previous answers to questions we need to put ourselves in a position to be able to pay our dividend first.

So you’ve talked a lot about improving shareholder value which hasn’t availed itself to you in this market. You do, but you also have I think in this call more served than any other call talked the need for a dividend and hopefully you are doing that because you realize that a dividend in those companies have pay dividend traded about twice the valuation you are trading at, and that would be a great way to enhance shareholder value. You agree with that?

Absolutely this is an evolution at Global Ship Lease; we’ve been taking huge steps forward in 2014. And this is the only reason that we’ve taken these steps forward is to be able to support a dividend to support equity price to return value to our shareholders and to be able to therefore have more flexibility going forward to do on events. It has to be a sort of a serial process we have to take out the old restricted debt, we did that in March. We’re not directly associated with the objective of reinstating a dividend but we also tied up the balance sheet by removing the old Series A preferred shares and eliminating what we describe as an equity claw in that instrument. So that gives us more flexibility down the track to raise unsecured capital including equity without looking for the holder of those preferred shares consent. And then finally along that path we’ve completed on the acquisition of this containership and we’ve demonstrated quite clearly that we can grow. We can grow in the way that we said we were going to, we can grow the way from CMA CGM, other people will do business with us not withstanding our close association with CMA. And we have talked a number of times on previous calls about the importance of the dividend. I agree with you that we have been less quantitative previously, but now that we’ve actually completed on this acquisition and another obstacle towards the goal of instating a dividend has been removed. We felt it appropriate to be more transparent with you guys.

So this last transaction you referenced in acquiring your latest vessel, it took roughly nine months from when I mean the strategy was implemented to being able to get that deal done. You foresee a similar timetable for the second deal that you need to get in order to achieve your debt coverage ratio. You think it’s going to take another nine months so you think you are further along as a result of the process?

We recapitalize, refinancing in March and we announced the acquisition of this vessel in September. So it’s six months, nevertheless it’s a long time and your point is valid. No I would be very disappointed if it was another nine months or six months before we were able to effect a further transaction.

Thank you. Our next question comes from [Chucky Madina with Southpole]. Your line is now open.

I have a few questions. First the bunker cost pressure you talked about the cost pressure. Bunker costs have gone down significantly in this quarter as you know, I was wondering if you could comment on the positive effects of that but also a couple that with there may be bounce back in costs related cost and given the ECA regulations coming into effect in January. And then I have a few more.

Sure yes bunkers cost have come down significantly as you know, which is good news for us indirectly we only incur a bunker cost if ships are far or idle, otherwise regularly bunker costs for the account our customer and the indirect benefits to us is if customer are charters CMA Sea Consortium, OOCL occurring lesser bunker then they’re earnings more their stronger counter parties. Yes there are increased regulatory hurdles to overcome, that’s a continuing trend we will have to deal with. It is the cost to compliance with ECA and all of the rest of it significant for Global Ship Lease, no it’s not. Again the majority of the ongoing cost is for our charters, they have to source fuel so on and so forth, lower sulphur content fuel in the emission controlled areas and regular way fuel elsewhere. We as owner have to make sure that if the vessels are going to trade to those areas and they’re equipped to carry the relevant fuel types and that is a relatively modest amount of capital investment, which we have done where we’ve needed to.

Next the dropped in the second hand index, it’s a non insignificant drop. I was wondering transactions are few and far between here. Can you please give us a sense behind this dropped age of vessels and size of vessels that have been transacted?

Yes it is quite steep drop; it’s very difficult to determine exactly what’s driving these sort of movements as indeed it’s very difficult to determine exactly what’s driving short-term charter rates. However now as the year has gone by increasing numbers of owners particularly in Germany have been distressed running out of liquidity now that’s led to accelerated scrapping levels and perhaps for ships which are less attractive in the repurchase market and that’s forcing asset values to close on this scrap value. And scrap value has gone down a little in recent weeks as well.

And lastly what is the expected drydocking cost of the Tianjin for the next year please?

Well what we’ve said previously is that on average the cost of drydocking one of our vessels based on our actual experience is approximately $1.6 million and that is on average $300,000 of loss of revenue because the vessel is off hire but 10 to 14 days and the balance $1.2 million $1.3 million is the check that we have to right to the yard and the suppliers of spare parts and tank, and I would expect that Tianjin’s to be there or there about.

Thank you. [Operator Instruction]. Our next question comes from Jim Marrone with Singular Research. Your line is now open

First of all Ian just wanted to congratulate you on a job well done as far as restructuring with the refinance and removing those restrictions and then pursuing a growth through acquisitions, so nice job well done. And then the question I had was in regards to lower bunker costs and how will it affect your operations. But I think it’s been addressed in the last question, so I don’t have any further question either than that.

I mean we may get a small of benefit eventually as lubricating oil costs might come down. We as owner bear the cost putting the oil in the engine and that tends to move over time the same way as bunkers. But I think oil prices have to be sustainably lower than it was previously for about to flow into, lubricating oil which is distillate obviously form of crude.

Thank you. Our next question comes from Zvi Rhine with Sabra Capital. Your line is now open.

Just a quick question on the Aquarius. I think that charter expired November 4th, they could have elected to terminate it earlier they clearly didn’t do that. Have they, given you any indication as to what their intention is? They extend at least for the next 30 days.

There is always a period, there is a range of redelivery date; this vessel was plus or minus 30 days. As we’ve commented spot rates for Panamax vessels had firmed recently. And given Aquarius is out at top charter $7,500, that’s below current market and one would expect the charterer to keep the vessel for as long as possible at the cheaper rates. So we would expect her to stay on charter towards the end of the maximum term. But yes she does come open this year and as we’ve said previously we have a number of options we could agree a new charter with Sea Consortium if they reminded to. If not for whatever reason we could seek a different charter, we’ll charter up, if nothing was available now and the seasonally weak parts of the year we could idle the vessel if we were confident of future employment opportunities at decent rates, and the last option would be to sell the vessel, either with a charter if we have one or more likely in these circumstances without. So those options remain available to us.

And Sea Consortium hasn’t given any indication if they want to continue on with the new charter at this point in time?

I wouldn’t as you'd expect discuss, commercial discussions. We will make an announcement in due course when it's appropriate.

I wouldn’t as you'd expect discuss, commercial discussions. We will make an announcement in due course when it's appropriate.

Fair enough. And last question -- maybe you won't be able to comment on this either. But given the increase in the spot rates, if you did a similar type of charter, where do you think it would be at? What would the daily rate be? And I know that you think that you're going seasonally slow curve to come down. Can you give us an indication where it is right now?

Well, I would think if someone was trying to fix a vessel for delivery today, you might be looking at 8 or little more -- $8,000 a day, $8,500 a day maybe. But don’t forget we're looking or Sea Consortium at least would be looking at this transaction from the perspective of agreeing a rate to apply from early December. So there'll be taking a forward view, and the stock market as I have indicated is softening. So we would love to be able to fix at today's levels, but the reality is that there's a tension in the negotiation between any charterer and any owner. Owner and charterers have different views.

Well, I would think if someone was trying to fix a vessel for delivery today, you might be looking at 8 or little more -- $8,000 a day, $8,500 a day maybe. But don’t forget we're looking or Sea Consortium at least would be looking at this transaction from the perspective of agreeing a rate to apply from early December. So there'll be taking a forward view, and the stock market as I have indicated is softening. So we would love to be able to fix at today's levels, but the reality is that there's a tension in the negotiation between any charterer and any owner. Owner and charterers have different views.

Thank you. And I'm showing no further questions at this time. I would like to turn the call back over to Ian Webber for further remarks.

Thank you everybody. Thank for listening, thanks for your questions. And we look forward to giving you further updates on our progress after we issue our fourth quarter results next year. Thank you.