Atlantic Offshore seeks bondholder OK to change financial covenant

By Angela McDaniels

Tacoma, Wash., Nov. 20 - Atlantic Offshore AS is asking the holders of its two issues of floating-rate senior bonds due 2015 to approve an amendment to one of its financial covenants, according to a notice from Norsk Tillitsmann ASA.

The bond issues are NOK 200 million and NOK 150 million in size.

The company plans to take delivery of four new vessels in 2014. It believes these new vessels are favorable to its long-term profitability, but the delivery will increase its consolidated balance sheet by about NOK 800 million. As a result, the company expects its market-adjusted equity ratio to decline to between 23% and 26%.

Under the current bond terms, the company must maintain a market-adjusted equity ratio of at least 30%. If bondholders approve the amendment, that requirement will be lowered to (a) 25% if the company has a contractual coverage of more than 60% or (b) 20% if it has a contractual coverage of more than 70%.

Contractual coverage is defined as the total number of vessel-months on charter parties exceeding 30 days divided by the total number of vessel-months capacity.

In exchange for the amendment, the company is offering a 1% amendment fee and a new covenant that would require it to maintain at least NOK 30 million of liquidity at all times beginning Jan. 1.

Bondholders will vote on the amendment at a meeting at 7 a.m. ET on Dec. 5 in Oslo.

At least half of each of the two bond issues must be represented at the meeting in order to form a quorum, and the holders of at least half of the bonds of each issue represented at the meeting must vote in favor of the proposal in order for it to pass.

The company said it has received commitments to support the proposal from 58% of the holders of the NOK 200 million issue and 78% of the holders of the NOK 150 million issue.

Pareto Securities AS (47 22 87 87 70) and SpareBank 1 SR Markets (47 915 02002) are acting as the company's financial advisers in connection with the consent solicitation.

Atlantic Offshore is based in Kystbasen Agotnes, Norway. It owns and operates multirole rescue vessels and platform supply vessels.

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