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Scorpio Tankers amends covenants of term loan facility due 2018
By Angela McDaniels
Tacoma, Wash., Jan. 4 - Scorpio Tankers Inc. amended its $27.3 million senior secured term loan facility due 2018 with DVB Bank SE, according to a company news release.
Under the amendment, the company's ratio of EBITDA to interest expense cannot be less than 1.25 to 1.00 for the period beginning with the fourth quarter of 2011 and ending with the fourth quarter of 2012. The minimum ratio will step up to 1.5 to 1.00 for the first quarter of 2013, 1.75 to 1.00 for the second quarter of 2013 and 2.00 to 1.00 after that. The ratio will be calculated quarterly on a trailing four-quarter basis.
The company must maintain at least $25 million of consolidated liquidity, which includes cash, cash equivalents and availability under the company's $150 million revolver due 2015. Of the $25 million, at least $15 million must be unrestricted cash and cash equivalents until the company owns, directly or indirectly, more than 15 vessels, at which time the amount will increase by $750,000 per each additional vessel.
Finally, the company is restricted from paying dividends until its EBITDA to interest expense ratio is 2.00 to 1.00 or greater.
Under the original terms of the facility, the minimum ratio of EBITDA to interest expense was 2.5 to 1.0, and the company had to maintain a minimum amount of unrestricted cash and cash equivalents equal to the higher of $500,000 per vessel and $10 million during the earlier of the first five fiscal quarters of the life of the loan or the third fiscal quarter of 2011.
The company entered into the credit facility on March 9, 2011 to help fund the purchase of the STI Spirit, an LR2 Aframax product tanker, for $52.2 million.
The company's subsidiary STI Spirit Shipping Co. Ltd. owns the vessel and is the borrower under the facility. Scorpio Tankers is guarantor.
Scorpio Tankers provides marine transportation of petroleum products and is based Monaco.
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