Capital Products lines up $460 million term loan for refinancing

By Wendy Van Sickle

Columbus, Ohio, July 28 – Capital Product Partners LP entered into a firm offer letter for an up to $460 million senior secured term loan facility with HSH Nordbank AG and ING Bank NV as mandated lead arrangers and bookrunners and BNP Paribas and National Bank of Greece AS as arrangers on May 22, according to a press release.

The new facility has a six-year maturity from drawdown and will be repayable no later than November 2023.

It is comprised of two tranches. Tranche A amounts to the lower of $259 million and 57.5% of the value of 11 of the borrower’s vessels with an average age of three years. It will be repaid in 24 equal quarterly installments of up to $4.8 million and a balloon installment of $143 million payable with the final quarterly installment.

Tranche B amounts to the lower of $201 million and 57.5% of the value of 24 of Capital Product’s vessels with an average age of 10.3 years. It will be repaid fully in 24 equal quarterly installments of up to $8.4 million.

Loans will bear interest at Libor plus 325 basis points.

The borrower said it plans to use loans under the new facility, along with about $120.6 million of available cash, to refinance four of its five existing credit facilities amounting to about $580.6 million in total.

The credit facilities include its 2007 $370 million revolving credit facility led by HSH; its 2008 non-amortizing $350 million credit facility led by HSH; its 2011 $25 million credit facility with Credit Agricole Bank; and its 2013 $225 million senior secured credit facility led by ING.

Following the planned refinancing, Capital Product’s debt will consist of only loans under the new facility and its 2015 credit facility with ING and will total about $475.8 million.

Covenants are substantially similar to covenants made under the existing credit facilities and do not contain any restrictions on distributions to unit holders in the absence of an event of default.

Closing is subject to finalization of the long form loan documentation.

The international, diversified shipping company is based in Athens.

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