Scorpio Bulkers to refinance vessel, repay vessel’s existing term loan

By Wendy Van Sickle

Columbus, Ohio, Sept. 27 – Scorpio Bulkers Inc. will repay the existing term loan on its 2016 Japanese built Ultramax dry bulk vessel SBI Hermes under a financing transaction in which it will sell the vessel then lease it back from the buyer, according to a press release.

Scorpio Bulkers said it will sell the vessel for $20.5 million, then lease it back through a five-year bareboat charter agreement at a rate of $5,850 per day.

If converted to floating interest rates, based on the expected weighted average life of the transaction, the equivalent cost of financing at current swap rates would be Libor plus 139 basis points per annum.

The transaction provides the company with options to repurchase the vessel after three years. This transaction, which shall be treated as a financial lease for accounting purposes, increases the company’s liquidity by approximately $11.3 million after repayment of the vessel’s existing loan, according to the release.

Scorpio Bulkers is a Monaco-based provider of marine transportation of dry bulk commodities.

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