Scorpio Bulkers Announces Amendments to Its Credit Facilities

scorpio bulkers

Scorpio Bulkers, Inc. (NYSE: SALT) (the “Company”) announced today that it has agreed in principle with its lenders to (i) amend the “interest coverage ratio” covenant under the relevant credit facilities, and (ii) reduce the “value-to-loan ratio” covenant under all of its credit facilities.

In addition to these amendments, the Company agreed in principle to prepay approximately $14.5 million in aggregate of principal installments on outstanding borrowings, of which approximately $12.1 million is to be applied against principal installments falling due between the second quarter of 2016 and the third quarter of 2018 (depending on credit facility).

Amendment of “Interest Coverage Ratio” Covenant
The Company has agreed in principle with its lenders to amend the relevant loan agreements such that the interest coverage ratio, as defined in each agreement, will not be applicable until the first quarter of 2018, at which point the ratio will be 1.00 to 1.00 and will be calculated on a year-to-date basis for the first and second quarter of 2018. Thereafter, the interest coverage ratio will revert to its original covenant level of 2.50 to 1.00.

Reduction in “Value-to-Loan Ratio” Covenant
The Company has agreed in principle with its lenders to amend all its loan agreements such that the respective “Value-to-Loan Ratio” covenant is reduced to 140%. An exception to this is the $67.5 Million Credit Facility, where the covenant level is reduced to 115%.

Loan Prepayments
$330 Million Credit Facility
The Company reached an agreement with the lenders to not make $10.0 million of installment payments falling due between the second quarters of 2016 and 2017 in exchange for an advance principal repayment of $10.0 million.

$67.5 Million Credit Facility
The Company reached an agreement in principle with the lender to make an advance principal repayment of approximately $2.5 million.

$42 Million Credit Facility
The Company reached an agreement with the lender to not make approximately $0.8 million of installment payments falling due in the first quarter of 2018 in exchange for an advance principal repayment of approximately $0.8 million.

$27.3 Million Credit Facility
The Company reached an agreement in principle with the lender to not make approximately $0.8 million of installment payments falling due between the second and third quarters of 2018 in exchange for an advance principal repayment of approximately $0.8 million.

$39.6 Million Credit Facility
The Company reached an agreement with the lender to not make approximately $0.5 million of installment payments falling due in the first quarter of 2018 in exchange for an advance principal repayment of approximately $0.5 million.

In addition to the above-mentioned amendments, the Company has also agreed in principle with all of its lenders to amend definitions within its “leverage ratio” and “consolidated net worth” covenants to exclude certain non-operating items.

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