Scorpio Tankers said it has received commitments from a group of financial institutions for a previously announced US$1Bn term loan and revolving credit facility
The credit facility was over-subscribed and capped at US$1Bn. It also features a US$200M accordion feature that can be declared within the next two years.
This will be used to finance 45 product tankers, which are currently unencumbered or financed through credit facilities and financial leases which carry higher margins and will be repaid. The credit facility is subject to customary conditions precedent and the execution of definitive documentation, and is expected to close in July 2023.
The tanker owner said the credit facility is expected to consist of a 50% term loan and a 50% revolving loan maturing in 2028. It bears interest at SOFR plus a margin of 1.95% per annum. A commitment fee of 0.78% per annum applies for any undrawn amounts.
The company will pay back the credit facility in quarterly instalments with a balloon payment due at maturity date, where the term loan portion for each vessel shall be repaid in full prior to the reduction of the revolving loan for each vessel.
Scorpio Tankers chairman and chief executive Emanuele Lauro said, “We appreciate our lenders and their commitment to the company. There is widespread confidence from market constituents on the persistence of current fundamentals, and the competitive structure, terms and conditions of this new loan, particularly the revolving line of credit, are testament to that view as well as to the steps we have recently taken.”
The Monaco-based shipowner has been looking to reduce its debt burden, wiping out debt worth US$1.2Bn off the balance sheet using lease buyouts and debt repayments over the course of 2022, including exercising purchase options on eight ships last October.
Total debt now stands just below US$2Bn.
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