New York-headquartered product tanker company International Seaways has closed on senior secured credit facilities worth a total of USD 390 million.
The crude oil and petroleum product tanker company said that the facilities consists of a 5-year USD 300 million senior secured term loan facility, a 5-year USD 40 million revolving credit facility, of which USD 20 million has been drawn, and a 2.5-year USD 50 million senior secured term loan credit facility.
The NYSE-listed ship owner and operator said that the proceeds from the loans were used to refinance USD 385 million existing high-cost secured and unsecured debt of the company and its subsidiaries.
Jeffrey Pribor, International Seaways’ CFO, said, “We are pleased to have closed on these attractive new credit facilities, reflecting our strong execution over the past three years and the continued support of an expanded top-tier banking group."
Jeffrey added: "The new credit facilities will reduce annual interest expense by approximately $15 million, by lowering our average interest rates on the refinanced portion of our debt by 3.5%, and our overall average interest rates by 2.0%, while enabling INSW to maintain one of the lowest leverage ratios in the industry and low cash break evens.”
The company’s President and CEO, Lois Zabrocky, said, “Importantly, the new facilities eliminate certain restrictions in our debt and position us to advance our disciplined capital allocation strategy following success both renewing our fleet near the bottom of the cycle and significantly paying down debt.”
In addition, the core facilities include a sustainability-linked pricing mechanism, which will be a first of its kind for a NYSE-listed ship owner and operator, as explained by International Seaways.
The adjustment in pricing will be linked to the carbon efficiency of the INSW fleet as it relates to reductions in CO2 emissions year-over-year, such that it aligns with the International Maritime Organization’s 50% industry reduction target in GHG emissions by 2050.
