Aries Maritime gets lender OK to relax interest coverage covenant

By Sara Rosenberg

New York, March 25 - Aries Maritime Transport Ltd. has received lender consent to relax the interest coverage covenant under its credit facility and, in return, will reduce the facility size to $290 million, according to an 8-K filed with the Securities and Exchange Commission Tuesday.

For the periods from Dec. 31 through June 30, the interest coverage covenant is relaxed to 2.25:1.0 from 3.0:1.0; for the period ending Sept. 30, the interest coverage covenant will increase to 2.75:1.0 from 2.25:1.0; and for the period ending Dec. 31, the interest coverage covenant will increase to 3.0:1.0 from 2.75:1.0.

As part of this amendment, the company must reduce outstanding borrowings under the credit facility to $200 million from their current level of $284.8 million by June 30 through the disposal of ships.

The company also must continue paying the increased pricing of Libor plus 175 basis points until a compliance certificate is provided to its lenders advising the interest coverage ratio meets the required level of 3.0:1.0.

In addition, the company can't pay a dividend for the quarter ended Dec. 31.

This amendment is subject to the execution of amendment documentation required by the lenders.

Aries Maritime is a Glyfada, Athens-based shipping company.

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