Safe Bulkers amended the terms of its loan with Danmarks Skibskredit (Danish Ship Finance), under which $40m is still outstanding.
The amended schedule will halt repayments until 2019, when Safe Bulkers will begin making slightly higher annual repayments than included in the previous schedule, with a balloon payment of $27m due in 2022.
To remain in compliance with the amended loan covenant, Safe Bulkers’ total consolidated liabilities must not exceed 90% when divided by its total consolidated assets (including charters) until the end of 2017 and 85% from 2018 onwards.
Safe Bulkers’ consolidated net worth is waived until the end of 2017, subject to the company maintaining a minimum fleet of 30 vessels and not less than $150m in total consolidated liabilities from 2018 onwards.
“The agreement with Danish Ship Finance is the fourth in a row which provides for alignment of financial covenants and deferral of about $3.4 million of debt originally payable until 2018, to years after 2019. With this agreement, the amended facilities represent about 60% of our debt, excluding sale and lease back financing arrangements and debt from state institutions,” explained Dr. Loukas Barmparis, president of the NYSE-listed company.
The ratio of the company’s EBITDA to its interest expense must also not be less than 2:1 on a trailing 12-month basis from 2018 onwards.
This is the ninth 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.
