Navios Maritime Holdings Inc. Announces Entry Into New Senior Secured Term Loan Facility

Rhea-AI Summary

Navios Maritime Holdings has secured a $115 million Senior Secured Term Loan from an entity linked to its CEO. The loan will help redeem $75.3 million of 11.25% Senior Secured Notes and refinance $39.7 million in existing debt. Maturities are set for February 2023 and November 2024, with a 10.5% interest rate. The loan is backed by various collateral, including the vessel “Rainbow N” and equity in subsidiaries. A Special Committee evaluated the terms, ensuring independent oversight. An Eighth Supplemental Indenture allows for restructuring of obligations regarding the secured notes.

Positive

• Secured a $115 million loan to enhance liquidity and pay down debt.
• Independent Special Committee evaluated and negotiated loan terms.
• Redemption of $100 million in Senior Secured Notes reduces future obligations.

Negative

• High interest rates of 10.5%, potentially increasing financial burden.
• Loan secured against key assets, increasing financial risk.

GRAND CAYMAN, Cayman Islands, June 30, 2021 (GLOBE NEWSWIRE) -- Navios Maritime Holdings Inc. (“Navios Holdings” or the “Borrower”) (NYSE: NM), a global seaborne shipping and logistics company, today announced the following events:

Senior Secured Term Loan Facility

Navios Holdings entered into a Senior Secured Term Loan facility with an entity (“Lender”) affiliated with its Chairman and Chief Executive Officer, providing for a loan of $115.0 million (the “Loan”) to -

1. advance $75.3 million for redeeming certain of Navios Holdings’ 11.25% Senior Secured Notes (“Secured Notes”) and for general corporate purposes (“Tranche B”); and
2. refinance $39.7 million of existing indebtedness of Navios Holdings owed to the Lender (“Tranche A”).

Tranche B of the Loan will mature on February 28, 2023. Tranche A of the Loan will mature on November 30, 2024. Both tranches include scheduled amortization payments and bear interest at a rate of 10.5% per annum, payable quarterly. The Borrower may elect to defer one scheduled amortization payment by 90 days and interest payments, in which case the applicable interest rate will be 12.0% per annum, compounded quarterly.

Loan Collateral

The Loan will be secured by:

1. First priority mortgage and related collateral (Assignment of Earnings and Insurances etc.) on the vessel “Rainbow N”.
2. First priority pledge on the Securities Account holding $33.7 million in aggregate principal amount of Navios Holdings’ 7.375% First Priority Ship Mortgage Notes due 01/15/2022 (“NM Ship Mortgage Notes”) and 40,587 common units of Navios Maritime Partners L.P. (NYSE: NMM).
3. Second priority share pledge on the Navios South American Logistics Inc. (“Navios Logistics”) shares owned by the Borrower.
4. Second priority share pledge in two companies that have entered into sale and leaseback agreements.
5. Second priority share pledge in five companies that hold the rights to certain bareboat contracts.
6. Second priority share pledge on 4,865,147 shares of Navios Maritime Acquisition Corp. (NYSE: NNA) common stock.
7. Second priority partnership interest pledge on 2,522,306 NMM common units.
8. Second priority pledge on the securities account holding $118.1 million in aggregate principal amount of NM Ship Mortgage Notes.
9. Second priority limited liability interest pledge on Navios GP L.L.C.
10. Unsecured corporate guarantee from all of the Borrower’s subsidiaries (not including Navios Logistics and its subsidiaries).

Special Committee

Navios Holdings’ Board of Directors formed a Special Committee of independent and disinterested directors to evaluate the Loan. The Special Committee, with the assistance of its independent financial and legal advisors, exclusively negotiated the terms of the Loan.

Eighth Supplemental Indenture

The previously disclosed Eighth Supplemental Indenture was entered into by Navios Holdings on June 29, 2021. Among other things, the Eighth Supplemental Indenture:

• following the redemption of $100.0 million in principal amount of the Secured Notes, eliminates Navios Holdings obligation to make a springing maturity offer for the Secured Notes in September of 2021;
• provides that future dividends paid in respect of the equity of Navios Logistics pledged as collateral for the Secured Notes may be used only to redeem or repurchase the Secured Notes;
• permits the Lender to take a second lien on the pledged share collateral (which pledged share collateral secures the Secured Notes on a first lien basis); and
• states that the Company may cancel amounts owed to Navios Logistics under that certain loan agreement dated as of April 25, 2019 (as amended).

About Navios Holdings

Navios Maritime Holdings Inc. (NYSE: NM) is a global seaborne shipping and logistics company focused on the transport and transshipment of dry bulk commodities including iron ore, coal and grain. For more information about Navios Holdings, please visit our website: www.navios.com.

Forward Looking Statements – Safe Harbor

This press release and our earnings call contain and will contain forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events, including our ability to refinance our near-term debt maturities, expected cash flow generation, future contracted revenues, potential capital gains, our ability to take advantage of dislocation in the market and any market recovery, and Navios Holdings' growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenue and time charters. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Navios Holdings at the time these statements were made. Although Navios Holdings believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Holdings. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to risks relating to: global and regional economic and political conditions including the impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity; demand for seaborne transportation of the products we ship; the ability and willingness of charterers to fulfill their obligations to us; prevailing charter rates; shipyards performing scrubber installations, drydocking and repairs; changing vessel crews and availability of financing; potential disruption of shipping routes due to accidents, diseases, pandemics, political events, piracy or acts by terrorists, including the impact of the COVID-19 pandemic and the ongoing efforts throughout the world to contain it; uncertainty relating to global trade, including prices of seaborne commodities and continuing issues related to seaborne volume and ton miles; our continued ability to enter into long-term time charters; our ability to maximize the use of our vessels; expected demand in the dry cargo shipping sector in general and the demand for our Panamax, Capesize, Ultra Handymax and Handysize vessels in particular; the aging of our fleet and resultant increases in operations costs; the loss of any customer or charter or vessel; the financial condition of our customers; changes in the availability and costs of funding due to conditions in the bank market, capital markets and other factors; increases in costs and expenses, including but not limited to: crew wages, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance, and general and administrative expenses; the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, general domestic and international political conditions; competitive factors in the market in which Navios Holdings operates; the value of our publicly traded subsidiaries; risks associated with operations outside the United States; and other factors listed from time to time in Navios Holdings' filings with the Securities and Exchange Commission, including its Forms 20-F and Forms 6-K. Navios Holdings 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 Navios Holdings' expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Holdings makes no prediction or statement about the performance of its common stock or debt securities.

Contact:

Navios Maritime Holdings Inc.
+1-345-232-3067
+1.212.906.8643
investors@navios.com

FAQ

What is the purpose of Navios Maritime Holdings' $115 million loan?

The loan aims to redeem $75.3 million of Senior Secured Notes and refinance $39.7 million of existing debt.

When do the loan tranches mature?

Tranche B matures on February 28, 2023, and Tranche A on November 30, 2024.

What interest rate does Navios Maritime Holdings' loan carry?

The loan has an interest rate of 10.5% per annum.

Who evaluated the loan terms for Navios Maritime Holdings?

A Special Committee of independent directors evaluated the loan terms.

What assets secure Navios Maritime Holdings' loan?

The loan is secured by the vessel 'Rainbow N' and other collateral including equity in subsidiaries.