Scorpio Tankers gets $150 million facility at Libor plus 275-325 bps

By Susanna Moon

Chicago, May 4 - Scorpio Tankers Inc. said it closed a $150 million senior secured term loan facility due May 3, 2017 with Nordea Bank Finland plc, DnB NOR Bank ASA and ABN AMRO Bank NV.

Interest is Libor plus 275 basis points to 325 bps depending on the company's debt-to-capitalization ratio. There is an unused fee of 40 bps.

Borrowings under the facility are available until May 3, 2012, and can only be used to finance up to half of the cost of future vessel acquisitions, with those vessels serving as collateral for the loans, according to a company press release.

Proceeds will be used to finance half of the two 2008 built 51,000 DWT product tankers that the company agreed to acquire last week. The total purchase price for the vessels is $70.0 million.

Borrowings for each vessel financed under this facility represent a separate tranche, with repayment terms depending on the age of the vessel at acquisition.

Each tranche under the new credit facility is repayable in equal quarterly installments, with a lump sum payment at maturity, based on a full repayment of the tranche when the vessel to which it relates is sixteen years of age. The remaining terms and covenants are similar to the covenants in Scorpio Tankers' $150 million credit facility, which was signed in June 2010 and fully drawn in November, and has an outstanding balance of $141.1 million as of May 4.

Nordea Bank and DnB are acting through their New York branch.

The facility "increases our ability to acquire vessels at opportune times while maintaining our prudent capital structure," Emanuele Lauro, chief executive officer and chairman of the board, said in the release.

The company is incorporated in the Marshall Islands and transports oil and petroleum products by sea.

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