U.S. Shipping sets Friday launch for $310 million credit facility

By Sara Rosenberg

New York, July 20 - U.S. Shipping Partners LP has scheduled a bank meeting for Friday to launch its proposed $310 million amended and restated credit facility, according to a market source.

CIBC and Lehman Brothers are the lead banks on the deal, with CIBC the left lead.

The facility consists of a $210 million term loan, a $50 million delayed-draw term loan and a $50 million revolver.

Proceeds from the credit facility, a proposed $200 million notes offering and a $75 million class B common units issuance will be used to fund $245.9 million into an escrow account available for the construction of four new articulated tug-barges, to fund up to $70 million of equity contributions to a joint venture, to refinance $152.1 million of existing indebtedness and for general corporate purposes.

Each of the financing transactions is dependent on completion of the others and the joint venture.

The joint venture being formed is USS Product Investors LLC and this new subsidiary has entered into an agreement with National Steel and Shipbuilding Co. for the construction of nine 49,000 dwt double-hulled tankers and the option to construct five additional tankers.

U.S. Shipping will own a 40% equity interest in the joint venture, with affiliates of The Blackstone Group, Lehman Brothers and certain other investors owning in aggregate a 60% equity interest.

U.S. Shipping is an Edison, N.J., provider of long-haul marine transportation services, primarily for refined petroleum products.

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