International Seaways Nets USD 390 Mn for Refinancing
New York-headquartered product tanker company International Seaways has closed on senior secured credit facilities worth a total of USD 390 million.
The facilities consists of a 5-year USD 300 million senior secured term loan facility, a 5-year USD 40 million revolving credit facility, of which USD 20 million has been drawn, and a 2.5-year USD 50 million senior secured term loan credit facility.
The tanker owner said that the proceeds from the loans were used to refinance USD 385 million existing high-cost secured and unsecured debt of the company and its subsidiaries.
Jeffrey Pribor, International Seaways’ CFO, explained that the new credit facilities would reduce annual interest expense by approximately USD 15 million, by lowering the company’s average interest rates on the refinanced portion of its debt by 3.5%, and its overall average interest rates by 2.0%.
“Importantly, the new facilities eliminate certain restrictions in our debt and position us to advance our disciplined capital allocation strategy following success both renewing our fleet near the bottom of the cycle and significantly paying down debt,” the company’s President and CEO, Lois Zabrocky, added.
Nordea Bank Abp, ABN AMRO Capital USA LLC, Crédit Agricole Corporate & Investment Bank, DNB Capital LLC and Skandinaviska Enskilda Banken AB acted as mandated lead arrangers and book runners. Nordea acted as administrative agent.
In addition, the core facilities include a sustainability-linked pricing mechanism, which will be a first of its kind for a NYSE-listed ship owner and operator, as explained by International Seaways.
The adjustment in pricing will be linked to the carbon efficiency of the INSW fleet as it relates to reductions in CO2 emissions year-over-year, such that it aligns with the International Maritime Organization’s 50% industry reduction target in GHG emissions by 2050.
The key performance indicator is calculated in a manner consistent with the de-carbonization trajectory outlined in the Poseidon Principles.
“Today, through this sustainability-linked pricing mechanism, we have created an innovative partnership with our banks that further advances our commitment to sustainability initiatives. We intend to continue to focus on our ESG footprint where appropriate and align our sustainability goals with those of our various stakeholders,” Zabrocky said.
International Seaways owns and operates a fleet of 42 ships, including 13 VLCCs, two Suezmaxes, six Aframaxes/LR2s, 12 Panamaxes/LR1s and 7 MR tankers. Through joint ventures, it currently has ownership interests in two floating storage and offloading service vessels.