Okeanis Eco Tankers Corp. – New Financings Update
Okeanis Eco Tankers Corp. (NYSE:ECO / OSE:OET) announced new financings for its fleet. The company secured a $60 million senior secured credit facility for the VLCC vessel Nissos Kythnos, provided by Danish Ship Finance A/S. This facility will close in May 2024 and is priced at 140 basis points over the Term SOFR until December 2026. The facility will be repaid in quarterly installments with a balloon payment at maturity. Additionally, a sustainability-linked margin adjustment will start in 2025.
OET also entered a supplemental agreement for the VLCC vessel Nissos Donoussa, reducing its margin to 165 basis points over Term SOFR. CFO Iraklis Sbarounis emphasized these transactions' role in reducing debt costs and enhancing capital structure. This development follows a series of refinancings and financing amendments over the last 10 months.
- Secured a new $60 million senior secured credit facility for the VLCC vessel Nissos Kythnos.
- Reduction of margin to 140 basis points over Term SOFR until December 2026.
- Sustainability-linked margin adjustment could reduce or increase margin by 5 basis points per year starting in 2025.
- Supplemental agreement for the VLCC vessel Nissos Donoussa with a reduced margin to 165 basis points over Term SOFR.
- Positive impact on debt cost reduction and capital structure improvement.
- Balloon installment of approximately $35.024 million payable at maturity.
- If no new margin agreement is reached post-2026, the company may need to prepay the facility.
Insights
The recent refinancing activities by Okeanis Eco Tankers Corp. are significant from a financial perspective for several reasons. First, the new
The facility's structure, including quarterly installments of approximately
Furthermore, the reduction of the margin to
From a market perspective, OET's strategic refinancing moves reflect the company's strong positioning within the tanker industry. The ability to secure favorable financing terms amidst a competitive market suggests robust confidence from financial institutions in OET's operational performance and market standing.
This type of financial maneuvering indicates OET is likely preparing for future expansions or capital needs, possibly related to fleet modernization or expansion, given the mention of a purchase option for the Suezmax Poliegos vessel. Investors should note that the company's capability to negotiate such terms showcases an alignment with broader market trends towards more sustainable and cost-effective operations.
The sustainability-linked margin adjustment is particularly noteworthy as it aligns with the growing emphasis on ESG (Environmental, Social and Governance) criteria in the financial markets. This could enhance OET's attractiveness to ESG-focused investors and provide a competitive edge in securing future capital.
Legally, the terms of the new financing agreements for both the Nissos Kythnos and Nissos Donoussa vessels suggest a balance of security and flexibility for OET. The inclusion of provisions allowing for the prepayment of the Nissos Kythnos facility without additional costs if a new applicable margin cannot be agreed upon after December 2026 is a prudent move. This offers OET significant leeway in managing its debt obligations and mitigates potential financial risks associated with interest rate fluctuations.
The sustainability-linked margin adjustment is a relatively novel feature in shipping finance, reflecting broader regulatory and market shifts towards sustainability. This provision not only incentivizes OET to meet sustainability targets but also ensures that the company remains adaptable to forthcoming regulatory changes and market demands.
Investors should consider these legal terms as indicative of OET's forward-thinking approach in managing its financial and regulatory obligations while maintaining operational flexibility.
ATHENS, Greece, May 21, 2024 (GLOBE NEWSWIRE) -- Okeanis Eco Tankers Corp. (“we”, the “Company”, “OET” or “Okeanis”) (NYSE:ECO / OSE:OET) is pleased to announce the following financings update relating to its fleet.
On May 20, 2024, we entered into a new
On May 21, 2024, we entered into a supplemental agreement to our senior secured credit facility currently financing the VLCC vessel Nissos Donoussa (the “Nissos Donoussa Supplemental Agreement”). The Nissos Donoussa Supplemental Agreement, which is expected to become effective in May 2024, provides for a reduction of the margin to 165 basis points over the applicable Term SOFR, through the duration of the facility. No other material terms of the facility have been supplemented or amended.
Iraklis Sbarounis, CFO of the Company, commented:
“We continue our focus in improving our capital structure and are very pleased to announce these two transactions, which reduce further our cost of debt. We are currently observing a very competitive financing market landscape for us, a testament to the positioning of the Company and our strong relationships with our financiers. We are delighted to commence partnerships with new ones and at the same time are proud and thankful to be able to benefit from ones we and our major shareholder have established and cultivated for many years. These transactions reduce our applicable pricing by approximately 100 basis points on our two VLCC vessels, and continue the momentum from our series of accretive refinancings and financing amendments over the last 10 months. We actively continue working on sourcing debt capital at favorable and value-creating terms to finance the purchase option of our Suezmax Poliegos under its current finance lease this summer, and target to provide further updates in due course.”
Contacts
Company
Iraklis Sbarounis, CFO
Tel: +30 210 480 4200
ir@okeanisecotankers.com
Investor Relations / Media Contact
Nicolas Bornozis, President
Capital Link, Inc.
230 Park Avenue, Suite 1540, New York, N.Y. 10169
Tel: +1 (212) 661-7566
okeanisecotankers@capitallink.com
This information is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.
About OET
OET is a leading international tanker company providing seaborne transportation of crude oil and refined products. The Company was incorporated on April 30, 2018 under the laws of the Republic of the Marshall Islands and is listed on Oslo Børs under the symbol OET and the New York Stock Exchange under the symbol ECO. The sailing fleet consists of six modern scrubber-fitted Suezmax tankers and eight modern scrubber-fitted VLCC tankers.
Forward-Looking Statements
This communication contains “forward-looking statements”, including as defined under U.S. federal securities laws. Forward-looking statements provide the Company’s current expectations or forecasts of future events. Forward-looking statements include statements about the Company’s expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts or that are not present facts or conditions. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “hope,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. The Company’s actual results could differ materially from those anticipated in forward-looking statements for many reasons, including as described in the Company’s filings with the U.S. Securities and Exchange Commission. Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this communication. Factors that could cause actual results to differ materially include, but are not limited to, the Company's operating or financial results; the Company's liquidity, including its ability to service its indebtedness; competitive factors in the market in which the Company operates; shipping industry trends, including charter rates, vessel values and factors affecting vessel supply and demand; future, pending or recent acquisitions and dispositions, business strategy, areas of possible expansion or contraction, and expected capital spending or operating expenses; risks associated with operations; broader market impacts arising from war (or threatened war) or international hostilities; risks associated with pandemics (including COVID-19), including effects on demand for oil and other products transported by tankers and the transportation thereof; and other factors listed from time to time in the Company's filings with the U.S. Securities and Exchange Commission. Except to the extent required by law, the Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. You should, however, review the factors and risks the Company describes in the reports it files and furnishes from time to time with the U.S. Securities and Exchange Commission, which can be obtained free of charge on the U.S. Securities and Exchange Commission’s website at www.sec.gov.
FAQ
What is the new credit facility amount Okeanis Eco Tankers secured for Nissos Kythnos?
When will the Nissos Kythnos credit facility close?
What is the interest rate for the new Nissos Kythnos credit facility?
When does the margin adjustment for the Nissos Kythnos facility start?
How much is the balloon installment for the Nissos Kythnos facility?
What is the margin reduction for the Nissos Donoussa supplemental agreement?
