As of September 30, 2018, the Company had approximately $20.0 million in available
borrowing capacity under its October 2016 Secured Term Loan and Revolving Credit Facility.
On June 29, 2018 the Company obtained approval to amend
one of the covenants in each of its bank loan facilities. The covenant, requiring the ratio of Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) to be at least two and a half times or three times interest has been
amended to a requirement of two times interest, up to and including September 30, 2020. In addition, the definition of interest under these facilities now excludes interest due or payable relating to debt financing obtained by the Company in
relation to its obligations associated with the construction of the Marine Export Terminal.
Under the terms of these amendments dividends may not be
declared or paid by the Company until on or after December 31, 2020.
The borrowers are required to deliver semi-annual compliance certificates,
which include valuations of the vessels securing the applicable facility from an independent ship broker. If the market value of the collateral vessels is less than 135% of the outstanding indebtedness under the January 2015 facility or 125% of the
outstanding indebtedness under the other facilities, the borrowers must either provide additional collateral or repay any amount in excess of 135% or 125% of the market value of the collateral vessels, as applicable. This covenant is measured
semi-annually on June 30 and December 31. As of June 30, 2018, we had an aggregate excess of $358.8 million above the levels required by these covenants, in addition to five additional vessels that are unsecured.
Financial Covenants
. The secured term loan facilities and the revolving credit facilities contain financial covenants
requiring the borrowers, among other things, to ensure that:
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the borrowers have cash and cash equivalents (including undrawn available lines of credit with a maturity
exceeding 12 months) of no less than $25.0 million or (ii) 5% of Net Debt or total debt, as applicable, whichever is greater;
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the ratio of EBITDA to Interest Expense (each as defined in the applicable secured term loan facility and
revolving credit facility or as amended), on a trailing four quarter basis, is no less than 2.00 to 1.00, until September 30, 2020 and no less than 2.50 to 1.00 or 3.00 to 1.00 thereafter;
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the borrower maintains a minimum ratio of shareholder equity to total assets of 30%.
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Restrictive Covenants
.
The secured term loan facilities and the revolving credit facilities provide that the
borrowers may not declare or pay dividends to shareholders out of operating revenues generated by the vessels securing the indebtedness until December 31, 2020 or thereafter, if an event of default has occurred or is continuing. The secured
term loan facilities and revolving credit facilities also limit the borrowers from, among other things, incurring indebtedness or entering into mergers and divestitures. The secured term loan facilities and revolving credit facilities also contain
general covenants that will require the borrowers to maintain adequate insurance coverage and to maintain their vessels. In addition, the secured term loan facilities include customary events of default, including those relating to a failure to
pay principal or interest, a breach of covenant, representation and warranty, a cross-default to other indebtedness and
non-compliance
with security documents.
Our compliance with the financial covenants listed above is measured as of the end of each fiscal quarter. As of September 30, 2018, we
were in compliance with all covenants under the secured term loan facilities and revolving credit facilities.
2017 Senior Unsecured
Bonds
General
. On February 10, 2017, we issued senior unsecured bonds in an aggregate principal amount of
$100.0 million with Norsk Tillitsmann ASA as the bond trustee (the 2017 Bonds). The net proceeds of the issuance of the 2017 Bonds, together with cash on hand, were used to redeem in full all of our outstanding 2012 Bonds. Under the
bond agreement governing the 2017 Bonds (the 2017 Bond Agreement), we have the option to issue additional bonds up to maximum issue amount of a further $100.0 million, at identical terms as the original bond issue, except that
additional bonds may be issued at a different price. The 2017 Bonds are governed by Norwegian law and listed on the Nordic ABM which is operated and organized by Oslo Børs ASA.
Interest
. Interest on the 2017 Bonds is payable at a fixed rate of 7.75% per annum, calculated on a
360-day
year basis. Interest is payable semi-annually on August 10 and February 10 of each year.
Maturity.
The 2017 Bonds mature in full on February 10, 2021.
Optional Redemption
. We may redeem the 2017 Bonds, in whole or in part, at any time beginning on or after February 11,
2019. Any 2017 Bonds redeemed; from February 11, 2019 until February 10, 2020, are redeemable at 103.875% of par, from February 11, 2020 until August 10, 2020, are redeemable at 101.9375% of par, and from August 11, 2020 to
the maturity date are redeemable at 100% of par, in each case, in cash plus accrued interest.
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