Seanergy Maritime Holdings Corp. announced that, pursuant to its strategy of pursuing attractive refinancing opportunities, it entered into two sale and leaseback agreements with unaffiliated third parties in Japan for the refinancing of the existing indebtedness over the 2010-built capesize vessels M/V Knightship and M/V Lordship. Moreover, the 2011-built M/V Championship, previously financed by a sale and leaseback structure, has been refinanced through a new sustainability-linked loan provided by a major European lender.
Refinancing of M/V Knightship
The vessel was sold and chartered back on a bareboat basis for a six-year period. The Company has continuous options to repurchase the vessel at predetermined prices, following the second anniversary of the bareboat charter. At the end of the six-year bareboat period, the ownership of the vessel will be transferred to Seanergy at no additional cost.
The $19.0 million financing bears interest of 3-month term SOFR + 2.80% per annum. The new interest rate is 120 bps lower than that of the existing financing. Approximately $8.5 million of additional liquidity was released to the Company through the refinancing.
The charter-hire principal will amortize over seventy-two consecutive monthly installments, averaging approximately $0.3 million each.
Refinancing of M/V Lordship
The vessel was sold and chartered back on a bareboat basis for a period of 4 years and 5 months. The Company has continuous options to repurchase the vessel at predetermined prices, following the second anniversary of the bareboat charter. At the end of the six-year bareboat period, Seanergy has the option to repurchase the vessel for $7.8 million.
The $19.0 million financing bears interest of 3-month term SOFR + 3.00% per annum. The new interest rate is 50 bps lower than that of the existing financing. Approximately $6.6 million of additional liquidity was released to the Company through the refinancing.
The charter-hire principal will amortize over fifty-three consecutive monthly installments, averaging approximately $0.2 million each.
Fearnley Securities AS have acted as the Company’s exclusive financial advisor for the two sale and leaseback financings, offering valuable support in the origination, structuring and execution of the transaction.
Sustainability linked refinancing of M/V Championship
The M/V Championship, previously financed through a sale and leaseback agreement with a major international commodities trader, has been recently refinanced through a sustainability-linked loan provided by a major European lender. The existing facility of the Company secured by the M/Vs Fellowship and Premiership was amended and restated to also include a loan for the M/V Championship, while a sustainability adjustment mechanism was introduced in respect of the underlying interest rate.
The $15.75 million loan for the M/V Championship has a five-year term and amortizes over twenty consecutive quarterly payments, averaging approximately $0.64 million per quarter. The interest rate is 2.65% over 3-month Term SOFR and can fluctuate by 0.05% based on certain emission reduction thresholds.
Following the termination of the sale and leaseback agreement with Cargill, the M/V Championship has entered a new time-charter (“T/C”) agreement at an index linked rate, at a premium over the Baltic Capesize Index. Moreover, a new scrubber profit share scheme has been introduced with Seanergy receiving the majority of the monetary benefit.
Stamatis Tsantanis, the Company’s Chairman & Chief Executive Officer, stated:
“Our latest refinancing transactions have multiple benefits for our Company in reducing our financing costs as we have secured lower pricing and more flexible financing structures, while expanding our lending relationships in Japan.
“At the same time, we are expanding the sustainability aspects of our loan portfolio by concluding one more sustainability-linked vessel financing, the fifth one for Seanergy. This attests our commitment to our ESG agenda and our support to the industry’s decarbonization efforts.
“Moreover, we are strengthening our balance sheet by releasing approximately $15 million of liquidity. Such additional liquidity can support future growth and further enhance our shareholders’ value through various potentially accretive moves.”