Proceeds from the term loan will be used to refinance the $458 mill outstanding balance of the company's existing loan, and for general corporate purposes, including fleet renewal and growth.
The revolver is currently undrawn.
The term loan, which contains an accordion feature whereby the loan may be increased by up to $50 mill, subject to certain conditions, will carry an interest rate of LIBOR plus 5.5%. It has a final maturity date of 22nd June, 2022, while the revolving credit facility has a final maturity date of 22nd December, 2021.
“We are pleased to have successfully completed this refinancing under attractive terms, enabling International Seaways to significantly extend the company’s debt maturities, increase its borrowing capacity and further enhance its financial flexibility,” said Lois Zabrocky, INSW president and CEO. “With approximately $200 mill of total liquidity, we are in a strong position to capitalise on attractive asset values, which are at a low point in the cycle, to grow our fleet and earnings power. We appreciate the strong support we have received from debt investors, highlighting International Seaways’ sizeable contracted cash flows, low breakeven levels, and spot market upside to both the product and crude tanker sectors.”
Jefferies Finance and JP Morgan Chase Bank served as joint lead arrangers, and UBS Securities served as joint bookrunner for the term loan. DNB Markets, Fearnley Securities, Pareto Securities. Skandinaviska Enskilda Banken acted as co-managers for the term loan and provided the $50 mill revolving credit facility.
In addition, INSW has confirmed that it is to buy two Suezmax newbuildings constructed at Hyundai Samho Heavy Industries.
The vessels are expected to deliver to the company by the end of next month. The transaction remains subject to customary closing conditions. The company said that it intended to fund the vessel acquisitions from available liquidity.
Following the delivery of these two vessels, INSW will have a fleet of 57 vessels, including 51 conventional crude and product tankers, in addition to its joint venture participation in four LNGCs and two FSOs.
“We are pleased to add these two new Suezmax tankers to our sizeable and diverse fleet,” said Zabrocky. “As INSW executes on our growth and renewal strategy, we will target vessels of high quality and attractive value at this low point in the cycle. INSW has a long history and well established track record owning vessels across the crude and product tanker sectors, enabling us to be opportunistic, yet focused in our efforts to grow and enhance our fleet for the benefit of shareholders.”