German container shipping major Hapag-Lloyd AG has decided to partially redeem EUR 170 million (USD 195.1 million) of its senior note on February 11, 2019, and prior to its maturity 2022 at a fixed redemption price of 103.375 percent.
The senior note was issued in February 2017 with an aggregate principal amount of EUR 450 million. The annual coupon is 6.75 percent.
As informed, the partial redemption will be done from cash proceeds, predominantly resulting from a settled long-term receivable of United Arab Shipping Company (UASC) in an amount of USD 152 million (around EUR 133 million as of today).
This receivable arose in the course of the business combination with Hapag-Lloyd from the sale of an investment in an associate, according to the company.
“Further deleveraging and optimizing our capital structure are important goals of our financial agenda,” Nicolás Burr, Chief Financial Officer of Hapag-Lloyd, said.
“Partially repaying this senior note ahead of maturity is a step on the right direction to reach our leverage target, further improve our repayment profile and continue to reduce interest expenses,” Burr added.
With a fleet of 222 containerships and a total transport capacity of 1.6 million TEU, Hapag-Lloyd has a container capacity of approximately 2.6 million TEU.