Euronav NV has reported that debt financing of the Maersk VLCC fleet acquisition is completed.
Namely, the company has issued a USD 235 million 7-year bond to the same investors who participated in the capital increase of 13 January 2014 and it has signed a commitment letter for a USD 500 million senior secured credit facility with DNB Bank ASA (“DnB”), Nordea Bank Norge ASA (“Nordea”) and Skandinaviska Enskilda Banken AB (“SEB”).
The bonds, which were many times oversubscribed, were issued as an enhancement to the equity to the same investors who participate in the capital increase of USD 350 million. The bonds have been issued at 85 per cent of their principal amount and bear interest at a rate of 5.95 per cent per annum for the first year, payable semi-annually in arrears. The interest rate will increase to 8.50% per annum for the second and third year and will increase again to 10.20% per annum from year four until maturity. The bonds are at any time redeemable by Euronav at par.
The senior credit facility will consist of a USD 500 million term loan to finance the acquisition of the VLCC fleet of Maersk Tankers Singapore Pte Ltd. The facility was fully underwritten in equal part by DnB, Nordea and SEB and is currently being syndicated. The credit facility has a 6-year maturity as from closing of the syndication, a process that usually takes 4 to 5 weeks. Borrowings under this facility will bear interest at a rate based on LIBOR plus a margin.
Management further reported that Euronav and GSO Capital Partners LP (“GSO”) (which is a division of Blackstone, one of the world’s leading alternative asset managers and advisory firms) have formed a joint venture for the purpose of potentially purchasing some modern high-quality vessels from certain subsidiaries of OSG (“Sellers”), who are currently in bankruptcy proceedings under Chapter 11 of the United States Bankruptcy Code. If the joint venture is the successful bidder for the assets in the bankruptcy sale process, which is being organized as an auction under Chapter 11, the joint venture will sell the vessels to Euronav shortly after Sellers’ delivery of the vessels. In the event that the sale of the vessels to Euronav is consummated, affiliates of GSO will receive, as part of purchase price paid by Euronav to the joint venture, both bonds and new equity issued by Euronav.
Euronav, February 5, 2014; Image: Maersk Tankers