Frontline has signed a new $500.1m senior secured term loan facility with DNB Bank, Nordea Bank Norge, ABN AMRO Bank, ING Bank, Skandinaviska Enskilda Banken, Danske Bank and Credit Suisse. DNB is the facility agent. The new facility will mature in December 2020 and will carry a rate of LIBOR plus a margin of 190 bps.
The proceeds of the new facility will be used to refinance four existing bank facilities of approximately $378m in aggregate and repay outstanding amounts owed another John Fredriksen vehicle, Ship Finance International, of approximately $113m.
The new facility will be secured by six VLCCs and six suezmax tankers. In addition, the margin on the $466.5m term loan facility, financing 16 product tankers, will be reduced to 190 bps.
The refinancing and amendments are expected to give a positive cash and P&L effect in 2016 alone of approximately $22m and $7m, respectively, and the average daily cash cost breakeven TCE rates on the current operating fleet of 43 owned or leased vessels is estimated to be reduced by approximately $1,400 per day.
Robert Macleod, ceo of Frontline Management, commented: “The terms achieved in the refinancing and related amendments improve our cash flow and lower our cash breakeven rates further. The terms clearly demonstrate the strong support we have from our relationship banks.”