Owner and operator of tanker vessels Navios Maritime Acquisition Corporation entered into a sale and leaseback agreement for four of its vessels on March 31.
The vessels in question are the tankers Nave Atria, Nave Aquila, Nave Bellatrix and Nave Orion, which were bareboat charted by subsidiaries of China Merchants Bank Limited.
Navios Acquisition opted for the move in order to refinance USD 71.5 million outstanding on the existing facility on the four product tankers.
The company has a purchase obligation at the end of the lease term and under ASC 842-40, the transaction is expected to be accounted for as a failed sale and leaseback transaction and result in a finance lease.
As a result of the refinancing, as of December 31, 2017, an amount of USD 32.8 million was reclassified from ‘Current portion of long-term debt, net of deferred finance cost’ to ‘Long term debt, net of current portion, premium and net of deferred finance cost’.
The facility will be repayable in 24 equal consecutive quarterly installments of USD 1.5 million each, with a final balloon payment of USD 35.8 million to be repaid on the last repayment date.
The facility matures in March 2024 and bears interest at LIBOR plus 305 bps per annum.
Navios Acquisition informed that it may use the funds to repurchase its outstanding capital stock and/or indebtedness at times.