Singapore: FSL Trust Management, the trustee-manager of First Ship Lease Trust, is today compliant with the terms of its original loan agreement, dated December 1, 2011, following a covenant relaxation period of two and a half years.
FSL Trust’s value-to-loan ratio reached over 125% for at the year-end 2014, compliant with the terms of the original loan agreed with the company’s lenders. This figures excludes the $10m security deposit FSL Trust placed in July 2012.
This security deposit will be released subject to compliance of the trailing four quarters’ debt service cover ratio (DSCR), FSL Trust said today in a statement.
The DSCR is forecast to be in excess of 1.2x at the end of the fourth quarter 2014, the company says. This exceeds the 1.1x ratio needed for compliance with the loan covenant and the 1.15x required for release of the security deposit.
“From recent correspondence with our lenders and due to recent financial performance, it is apparent that the Trust will be compliant with the terms of its original loan agreement of 2011. This is the clearest demonstration yet that restructuring efforts are working and we continue to focus on ensuring the long-term stability of the Trust,” said Alan Hatton, CEO of FSL Trust Management.
“With two older container vessels likely to be redelivered in early 2016, our focus will be on replacing that revenue stream and renewing the fleet. Recent improved performance and a resultant healthier cash position will help facilitate this,” Hatton said.
First Ship Lease Trust currently operates seven small-sized containerships and seven products tankers.
“It has been clear that our Lenders have seen that the Trust’s performance has dramatically improved both in terms of commercial performance and the upkeep of our fleet since the Board was replaced and new management was installed during 2013,” said Tim Reid, chairman of FSL Trust Management.
“We hope this significant financial and operational improvement goes a long way to restoring the market’s faith in the Trust.” [06/01/15]
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