Overseas Shipholding to launch $1.35 billion facility on Thursday

By Sara Rosenberg

New York, June 10 – Overseas Shipholding Group Inc. will hold a bank meeting on Thursday to launch a $1.35 billion exit financing credit facility, according to a market source.

Jefferies Finance LLC is leading the deal.

The facility consists of a $75 million 4˝-year asset-based revolver at OSG Bulk Ships (domestic borrower), a $75 million 4˝-year cash-flow revolver at OSG International (international borrower), a $600 million five-year covenant-light term loan at OSG Bulk Ships and a $600 million five-year covenant-light term loan at OSG International, the source said.

Pricing on the asset-based revolver can range from Libor plus 225 basis points to 275 bps based on availability, and pricing on the cash-flow revolver is talked at Libor plus 450 bps with a 1% Libor floor.

The OSG Bulk Ships term loan is talked at Libor plus 475 bps with a 1% Libor floor, and the OSG International term loan is talked at Libor plus 525 bps with a 1% Libor floor, the source continued.

Original issue discounts on the term loans are not yet available.

Both term loans have 101 soft call protection for one year.

Proceeds will be used to help fund the company’s exit from bankruptcy.

Overseas Shipholding, a New York-based tanker company, filed for bankruptcy on Nov. 14, 2012 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 12-20000.

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