Safe Bulkers has amended the repayment profile of around 30% of its debt by adjusting the terms of its loan from DNB (UK), which has an outstanding balance of $145.5m.
“The latest amendment strengthens our balance sheet, reduces exposure to financial covenants during turbulent times and provides for financial flexibility with zero cash outflows for the next two years,” Dr. Loukas Barmparis, Safe Bulkers’ president, said in a release today.
“The DNB facility represents about 30% of our debt, excluding sale and lease-back financing arrangements recorded as debt, and debt from state institutions with very low margins.”
Repayments of the existing loan will commence in 2018, with a $84m balloon payment due in 2022.
Safe Bulkers must maintain consolidated net worth of $150m and a minimum fleet of 30 vessels from 2018 onwards to remain compliant with the amended loan covenant.
The aggregate market value of the 11 vessels against which the loan is secured divided by the aggregate outstanding loan value must exceed 110% before the end of 2017 and 120% 2018 onwards, the NYSE-listed company said.
Subsequent to the amendment, Safe Bulkers’ total consolidated liabilities divided by its total consolidated assets (including charters) must not exceed 90% up to and including the year-end 2017 and 85% from 2018 onwards.
Safe Bulkers’ ratio of EBITDA to its interest expense must be not less than 2:1 on a trailing 12-month basis from 2018 onwards.
This is the sixth time Safe Bulkers has amended loan facilities with its lenders order “to maintain a comfortable debt repayment profile, at very competitive costs”, as Barmparis stated previously.