This move strengthens the company's financial flexibility by extending debt maturities to 2022 and smoothing out its repayment profile, providing additional borrowing capacity to support accretive growth, and lowering the cost of debt, Ardmore said.
The tanker concern has received total senior secured term loan commitments of $364 mill made up of two facilities.
The first facility consists of $213 mill of funded debt from ABN AMRO and DVB Bank, including an incremental commitment of $20 mill to fund future acquisitions. The second is $151 mill of funded debt from Nordea Bank and Skandinaviska Enskilda Banken (SEB).
The covenants and other conditions of both facilities are consistent with those of the company's previous credit facilities, and both contain accordion options whereby the facilities' amounts can, subject to the lender's consent, be increased to finance the acquisition of additional vessels.
Ardmore said that this refinancing move will reduce the interest expense by about $2 mill this year and improve the company's surplus cash flow by around $6 mill over the same period.
Anthony Gurnee, Ardmore's CEO, commented, "This opportunistic refinancing on attractive terms reflects the company's strong banking relationships and improving financial profile, as well as the successful completion of a newbuilding programme that has more than doubled the size of our fleet since our IPO with the addition of new, state-of-the-art, Eco-design vessels.
“Furthermore, Ardmore is well positioned to capitalise on future growth opportunities with the additional lending capacity built into these facilities. We appreciate the continued support of ABN Amro, DVB Bank, Nordea Bank, and SEB.
“Meanwhile, we continue to be bullish on the outlook for the product tanker market, which is benefiting from the ongoing impact of the new oil market and strong underlying fundamentals that are driving an increasing disparity between tonne/mile demand growth and a declining MR orderbook.
“While the company experienced strong rates in the third quarter, rates in the fourth quarter of 2015 were more comparable to rates in the fourth quarter of 2014. A strong winter market re-established itself in the latter part of the fourth quarter and has persisted into 2016, with global spot market rates for MRs thus far in January averaging $20,000 per day on a timecharter equivalent basis.
"With our substantial year-on-year increase in revenue days for 2016, a strong charter rate environment for our high-quality MR tanker fleet, and an improved cost of capital as a result of this successful refinancing, Ardmore is well positioned to continue generating strong returns and creating substantial value for shareholders," he concluded.