International Seaways enters $160 million 5.5-year revolver

By Marisa Wong

Los Angeles, Oct. 2 – International Seaways, Inc., International Seaways Operating Corp. and some of their subsidiaries entered into a $160 million revolving credit agreement on Sept. 27, according to an 8-K filing with the Securities and Exchange Commission.

The revolver, which is secured by a first lien on five of the company’s vessels, matures on March 27, 2029 and reduces on a 20-year age-adjusted profile. That maturity date is subject to acceleration upon the occurrence of certain events.

Interest is calculated based on term SOFR plus an applicable margin of 190 basis points and is subject to a sustainability-linked pricing mechanism, under which the applicable margin may be decreased or increased by 7.5 bps.

The sustainability-linked pricing feature is linked to three factors: a fleet sustainability score, the amount of sustainability-linked investment and the frequency of lost time injuries. The company will be required to deliver annually, beginning with the period ending June 30, 2024, a sustainability certificate for the preceding calendar year setting out its sustainability-related calculations. If the company achieves all of the targets set out in the credit agreement, the applicable margin will be decreased by 7.5 bps; otherwise, if it fails to achieves any of those targets the margin will be increased by that same amount.

The credit agreement includes financial covenants that are consistent with existing financial covenants in the company’s 2022 credit facility and require the company to maintain a minimum liquidity level of the greater of $50 million and 5% of its consolidated debt; to ensure the maximum leverage ratio will not exceed 0.60 to 1.00 at any time; to ensure that current assets exceeds current liabilities; and to ensure the aggregate fair market value of the collateral vessels will not be less than 135% of the aggregate outstanding principal amount of the revolver.

Nordea Bank Abp, New York Branch, ING Bank NV, London Branch, Credit Agricole CIB and DNB Markets Inc. are mandated lead arrangers and bookrunners; and Danish Ship Finance A/S and Skandinaviska Enskilda Banken AB (publ) as lead arrangers. Nordea is acting as administrative agent, collateral agent, coordinator and security trustee, and ING is acting as sustainability coordinator.

On Sept. 29, $50 million of the $160 million available under the revolver was drawn for general corporate purposes.

Prior to entering into the revolver, the company and some of its subsidiaries had, earlier in September, conducted internal sale transfers of four collateral vessels. In connection with that, the borrower repaid about $104.3 million that was outstanding under that credit agreement dated May 20, 2022, and those vessels and related vessel-owning subsidiaries were released as collateral under the 2022 credit facility.

As of Sept. 30 and taking into account those repayments, the aggregate outstanding principal amount of the term loans under the 2022 credit agreement was about $171.4 million, and the aggregate principal amount of the lenders’ revolving credit commitments was about $257.4 million (none of which was outstanding). As of that date, the company’s aggregated total undrawn revolving credit capacity under the 2022 credit facility and the new revolver was about $367.4 million.

International Seaways is a New York-based oil and petroleum shipping company.

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