Scorpio Tankers $150M Credit Facility, Form F-3
Scorpio Tankers Inc. (NYSE: STNG) ("Scorpio Tankers" or the "Company") announced today that the Company executed a credit facility with Nordea Bank Finland plc, acting through its New York branch, DnB NOR Bank ASA, acting through its New York branch, and ABN AMRO Bank N.V. for a senior secured term loan facility of up to $150 million and filed a shelf registration with the Securities and Exchange Commission.
The 2011 Credit Facility will be used to finance 50% of the two 2008 built 51,000 DWT product tankers that the Company agreed to acquire last week. The aggregate purchase price for the vessels is $70.0 million. The vessels are charter free and are scheduled to be delivered to the Company in the first half of May 2011.
Borrowings under the credit facility are available until May 3, 2012 and bear interest at LIBOR plus an applicable margin of 2.75% per annum when our debt to capitalization (total debt plus equity) ratio is less than 45%, 3.00% per annum when our debt to capitalization ratio is greater than or equal to 45% but less than or equal to 50%, and 3.25% per annum when our debt to capitalization ratio is greater than 50%. A commitment fee equal to 40% of the applicable margin is payable on the unused daily portion of the credit facility. The credit facility matures on May 3, 2017 and can only be used to finance up to 50% of the cost of future vessel acquisitions, which vessels would be the collateral for the credit facility.
Borrowings for each vessel financed under this facility represent a separate tranche, with repayment terms dependent on the age of the vessel at acquisition. Each tranche under the new credit facility is repayable in equal quarterly installments, with a lump sum payment at maturity, based on a full repayment of such tranche when the vessel to which it relates is sixteen years of age. The remaining terms and covenants are similar to the covenants in Scorpio Tankers' 2010 $150 Million Credit Facility, which was signed in June 2010 and fully drawn in November 2010. The 2010 Credit Facility has an outstanding balance of $141.1 million as of May 4, 2011.
In addition as Scorpio Tankers has been public for 12 calendar months, the Company filed a Form F-3 with the Securities and Exchange Commission, which can be used to issue common shares, preferred shares, debt securities, which may be guaranteed by one or more of our subsidiaries, warrants, purchase contracts, and units for an aggregate of up to $500 million.
Emanuele Lauro, chief executive officer and chairman of the board, commented, "The new $150 Million Credit Facility increases our ability to acquire vessels at opportune times while maintaining our prudent capital structure, and we are delighted by the endorsement of our strategy by our lenders. In addition, the shelf registration statement is a natural step in the long-term development of our Company."
