The availability of historically low pricing and a 10-year deal led OMI Corp. to amend its bank debt and roll $372 million in facilities into a $320 million reducing revolver. "Cut the pricing in half, that was the motivation," said Kathleen Haines, OMI's senior v.p., cfo and president. The new credit is priced at LIBOR plus 67.5 basis points, down from a range of LIBOR plus 90 basis points and LIBOR plus 2%.
With the amended deal, OMI has also extended maturities from 2007 to 2015. According to Haines, improvements in terms and pricing for the crude oil and petroleum shipping company derived from enhancements on the credit quality of the company. Timing was also favorable due to a current "strong demand for shipping credits," she noted. The company would have otherwise refinanced in 2007, noted Haines.
The company was approached by bookrunner ING Bank. The bank group stayed unchanged with the shipping company holding on to its core relationship banks. Deutsche Schiffsbank Aktiengesellschaft together with DnB NOR Bank, NIB Capital Bank and Nordea Bank Finland, through their New York branches, are OMI's four other lead arrangers. Haines said Hugh Baker, at ING's London offices, had been instrumental in the new deal.
The company has a separate $375 million revolver with the same bank group. Current borrowings are $15 million. The deal is led by Nordea and is priced at LIBOR plus 85 basis points.