Safe Refinances US$82.4M Credit Facilities With Proceeds From New US$75.3M Term Loan Facility With RBS

SafeBulkers

Safe Bulkers announced that the Company has completed prepayment of three credit facilities, in the total amount of US $82.4 million, related to one Capesize class vessel, one Post-Panamax class vessel and one Panamax class vessel.

The prepayment resulted in the release of collateralized value of assets of US $19.5 million (including US $4.7 million in cash). The prepayment was financed with the proceeds from a new US $75.3 million term loan facility agreement with the Royal Bank of Scotland plc, maturing December 2021. The new term loan facility is secured by the same three vessels that the old facilities financed and contains the following financial covenants, in line with the existing loan and credit facilities of the Company:

  • The total consolidated liabilities of the Company divided by its total consolidated assets must not exceed 85% until year end 2017, and 80% 2018 onwards.
  • The aggregate market value of the three vessels under the facility divided by the aggregate outstanding loan value must exceed 110% until year end 2017 and 120% 2018 onwards.
  • The ratio of the Company’s EBITDA1 to its interest expense must be not less than 2.0:1 on a trailing 12 month basis, applicable from 2018 onwards.
  • The consolidated net worth of the Company (total consolidated assets less total consolidated liabilities) must not be less than US $150.0 million.

The repayment schedule for the facilities that were prepaid and the repayment schedule for the new facility are presented in Table 1 below:

Table 1: Repayment Schedule on annual basis in US$ million.
2016 2017 2018 2019 2020 2021 2022 2023 2024 Total
Old facilities 9.1 9.1 9.1 28.1 6.0 6.0 6.0 6.0 3.0 82.4
New facility 3.8 3.8 3.8 7.1 7.1 49.7 0.0 0.0 0.0 75.3

Dr. Loukas Barmparis, President of the Company, said: “The new credit facility was designed to refinance three old credit facilities, resulting in the extension of balloon payments under the facilities from 2019 to 2021, and the reduction of principal payments for the first four years at a competitive margin.”

1 EBITDA is not a recognized measurement under US GAAP and represents net income before net interest expense, income tax expense, depreciation and amortization.

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