U.S.-based tanker shipping company Overseas Shipholding Group (OSG) has closed a five-year USD 325 million term loan credit facility with The Prudential Insurance Company of America and other syndicate lenders.
The loan will be used by OSG’s subsidiaries, led by Overseas Bulk Ships, to refinance and replace its existing loan with Jefferies Finance LLC and other lenders.
As informed, the refinancing loan bears interest at an annual rate equal to the prevailing 30-Day LIBOR plus a margin of 500 basis points and is secured by the issued and outstanding stock of OBS.
In addition, OSG used a portion of the new loan to amend its USD 75 million secured asset-based revolving loan with Wells Fargo Bank by reducing the maximum credit line available and extending the term through August 2, 2019.
The amendment also reduced the number of vessels serving as collateral for the OBS ABL Facility.
Sam Norton, President and CEO of OSG, announced the refinancing commitments in November, while reporting the company’s business results for the first nine months of the year. Norton said that the financing would add longer-term stability to the company’s balance sheet, clearing the path for the pursuit of expansion opportunities.
The Florida-based tanker shipping company closed the first nine months of this year with improved earnings.
The company reported a net income of USD 18.7 million during the period from January to September 2018, compared to USD 2.3 million posted in the same period a year earlier. Net income for the third quarter stood at USD 11.9 million, compared to a net loss of USD 6.3 million seen in the same quarter 2017.