OMI Corp. recently consolidated, amended and restated two credits into a new $245 million deal in order to take advantage of lower pricing and less restrictive covenants. The international tanker owner and operator felt it was a good time to refinance its previous $310 million credit and $78 million facility because of positive market conditions, said Kathleen Haines, senior v.p., cfo and treasurer.
The credit matures in 2010, extending the original 2005 and 2007 maturity dates put in place for the previous credits. The new facility, which is secured by 18 vessels, has a balloon payment of $111 million in 2010. The deal allowed the Stamford, Conn.-based company to forego a $91.7 million balloon payment in 2005 and a $43.7 million balloon payment in 2007 with the newly scheduled 2010 payment. Pricing on the new revolver is also cheaper at LIBOR plus 15/8%, she said. The previous deals were priced off grids in the LIBOR plus 22/5% range.
Nordea Bank and ING Bank lead the credit and were leads on the previous deals as well, Haines noted. She added that the deal was syndicated to the company's group of six core banks. A banker said Nordea was the sole lead for the $310 million term loan, while Nordea and ING led the $78 million revolver. He added that the consolidated deal provides OMI with the opportunity to improve its liquidity position.
The new credit initially gives OMI $16 million and will provide $19 million in additional liquidity over the next two years. As of March 28, about $222 million was drawn on the credit. OMI's total long-term debt as of last March was about $509 million. OMI provides seaborne transportation services for crude oil and petroleum products. Its customers include independent and state-owned oil companies, oil traders and government entities.