American Shipping gets consent to pay in-kind interest on bonds due 2012 through maturity

By Angela McDaniels

Tacoma, Wash., Feb. 26 - American Shipping Co. ASA, formerly Aker American Shipping ASA, received bondholder consent to exercise the pay-in-kind option on its senior unsecured callable PIK bonds due 2012 through maturity.

The company also received consent to permanently disregard any effect of non-cash gains or losses from the change in fair market value of interest-rate hedging agreements when calculating equity, according to a company news release.

Under the terms of the bonds, the company must maintain at least $140 million of equity. Without the change, American Shipping's equity would have fallen below this requirement because of falling interest rates.

Bondholders of record as of Wednesday will receive a fee equal to 0.1% of par.

Bondholders voted on the proposals at a meeting on Wednesday in Oslo. A quorum of at least half the bonds was needed, and the company needed consents from holders of at least two-thirds of the bonds represented at the meeting.

American Shipping announced plans for the meeting on Feb. 17.

In January, the company sought consent to disregard the unrealized, non-cash gains or losses related to interest-rate hedging for the fourth quarter of 2008 through the third quarter of 2009.

Bondholders were scheduled to vote on that proposal at a meeting on Jan. 23.

American Shipping is a shipping company based in Oslo. Its principal subsidiary has headquarters in Philadelphia.

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