Safe Bulkers Agrees New Loan Refinancing Deals

MoneyIllustration. Image Courtesy: Pixabay under CC0 Creative Commons license

Dry bulk shipping company Safe Bulkers has reached amendments on a number of its loan facilities during the third quarter of 2018.

In October, the company signed an amendment to an existing loan facility of USD 32 million initially intended for two vessels, upsizing it to a total of USD 52.4 million expiring in 2023. The amendment is substituting one vessel by a recently acquired Capesize class vessel and refinancing the existing facility for two other vessels.

As a result the new facility would be secured by four vessels, and the balloon payments for the refinanced two vessels would be pushed back by one year from 2022 to 2023, according to Safe Bulkers.

In addition, subsequent to September 30, 2018, the company accepted offer letters, which are subject to completion of loan documentation, to refinance certain loan and credit facilities.

Namely, Safe Bulkers agreed to amend an existing loan facility of USD 90.7 million expiring in 2021 secured by 6 vessels by extending the tenor by 3 years, and pushing back balloon payments to 2024.

It also agreed to amend and expand existing loan facilities of USD 71.3 million expiring in 2022 secured by 5 vessels to a total of USD 101.3 million secured by 6 vessels, extending the tenor of the initial facilities by two years, and pushing back balloon payments to 2024.

Additionally, the company reached a deal to refinance an amount of USD 47.8 million being part of an existing loan facility expiring in 2022 secured by 4 vessels by extending the tenor by 2 years and pushing back balloon payments to 2024.

Furthermore, the company would refinance a USD 50.6 million loan facility secured by 4 vessels, downsizing it to USD 40 million secured by three vessels and extending the tenor by three years and pushing back balloon payments to 2025. Two of the encumbered vessels under the original agreement were released and refinanced by the loan facility of USD 52.4 million and one unencumbered vessel was added.

“As a result of the above actions, we pushed back $132.4 million balloon payments scheduled in 2021 and 2022 to 2023 and 2025, expanding the average tenor, creating a smoother repayment schedule for the following 5 years, reducing the average margin and maintaining the same covenants of our debt,” Safe Bulkers said in its third quarter 2018 financial report.

Safe Bulkers’ net revenues for the third quarter of 2018 increased by 34% to USD 50.1 million from USD 37.3 million during the same period in 2017, while net income for the quarter increased by 21% to USD 8.1 million from USD 6.7 million reported a year earlier.

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