Orrick Advises Harley Marine on Inaugural $455 Million Whole Business Securitization

Orrick has advised leading marine transportation company Harley Marine Services Inc. (HMS) on its inaugural securitization, a $455 million whole business transaction issuing bonds to the capital markets backed by collateral consisting of, among other things, a fleet of 122 vessels and barges and customer contracts. 

The securitization’s $450 million Class A-2 and $50 million Class B bonds received ratings of BBB (sf) and BB (sf), respectively, from Kroll Bond Rating Agency. The bonds were sold to a diversified mix of leading institutional investors in a private offering pursuant to Rule 144A under the Securities Act of 1933, as amended. Guggenheim Securities acted as Sole Structuring Advisor and Sole Bookrunner for the transaction. Due to the first impression nature of this transaction, it required the Orrick team to develop a wide range of new solutions and overcome complexities relating to the Jones Act, environmental matters, operations matters, matters relating to the 800 crew and other novel issues for a whole business securitization of an operating company. 

Harley Marine Services has been in continuous operation since 1987 as a full service marine logistics company with a national footprint and strong, long-standing client base, providing bunkering, fuel terminal transportation, ship assist and escort, harbor and contract services, and terminal services. Harley Franco, the Chairman, CEO and Founder, owns 53% of Harley Marine Services, while the remaining 47% is owned by Macquarie and affiliates. The company operates 122 vessels nationwide across inland rivers, as well as nine ports throughout Alaska, along the East and West Coasts, and the Gulf of Mexico. 

Orrick’s team was led by structured finance partner Leah Sanzari and included a core team of Thomas Mitchell, Sushila Nayak, Gaelyn Sharp, Elizabeth Elias, SueAnn Yue, Michael Sugarman and Michelle Rodriguez. In addition, the following Orrick team members provided specialist advice: Bill Haft, Josh Raff, John Narducci, Emin Guseynov, Jamie Larkin, Mitch Pahl, Bob Lawrence, Rob Stern and Deborah Ann Abernathy.