Bermuda-based operator of mid-sized tankers Teekay Tankers has closed a new five-year, $533 million revolving credit facility to refinance 31 vessels.
The size of the new debt facility was reduced since announcing the term sheet signing in November 2019 as a result of excluding five vessels from the new facility, including the three vessel sales noted above and a potential for further opportunistic vessel sales.
The proceeds from the new debt facility will be used to repay approximately $455 million of the company’s existing debt. The new debt facility has substantially similar terms and extends balloon maturities from 2020/2021 until the end of 2024.
Including the agreed asset sales and the new debt facility, the company’s liquidity is expected to increase by approximately $73 million.
“We are excited to announce these opportunistic asset sales for combined proceeds of approximately $83 million, which is consistent with our strategy presented at our November 2019 Investor Day and accelerates our planned balance sheet delevering efforts,” said Kevin Mackay, Teekay Tankers’ President and CEO.
“The sale of a portion of our ship-to-ship transfer business also allows us to focus and simplify our core business of crude oil and clean product shipping. Importantly, by retaining our core Full-Service Lightering business in the U.S. Gulf, we will continue to benefit from U.S. import and growing export volumes, which provides synergies with our existing Aframax tanker fleet,” Kevin added.
“We are also grateful for the continued strong support we receive from our bank group, as represented by our new $533 million debt facility, which was approximately two times oversubscribed, and provides the company with increased financial flexibility,” he concluded.