International Seaways seals refinancing with pricing linked to carbon efficiency
American tanker operator International Seaways has closed credit facilities worth a total of $390m, used to refinance $385m of existing debt.
The facilities consists of a 5-year $300m senior secured term loan facility, a 5-year $40m revolving credit facility and a 2.5-year $50m senior secured term loan credit facility.
Jeffrey Pribor, CFO of International Seaways, commented, “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. 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.”
Lois Zabrocky, president and CEO, added: “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.”
Nordea, ABN AMRO Capital, Crédit Agricole Corporate & Investment Bank, DNB Capital and Skandinaviska Enskilda Banken acted as mandated lead arrangers and bookrunners.
The $300m loan and $40m facility include a sustainability-linked pricing mechanism certified by an independent ESG firm. Pricing adjustments will be linked to the carbon efficiency of the company’s fleet.
“Today, through this sustainability-linked pricing mechanism, we have created an innovative partnership with our banks that further advances our commitment to sustainability initiatives. We intend to continue to focus on our ESG footprint where appropriate and align our sustainability goals with those of our various stakeholders,” Zabrocky said.
