Global Ship Lease has completed a new syndicated $268 million senior secured credit facility comprised of two tranches with major commercial lenders Credit Agricole Corporate and Investment Bank, ABN AMRO Bank, CIT Bank, Hellenic Bank and Siemens Financial Services.
The company expects to draw down the first tranche of the new senior loan, in full, of $230 million shortly and will use the proceeds to refinance five existing senior credit facilities with maturities in December 2020 and April 2021, thereby reducing its cost of debt, extending maturities, and simplifying its debt structure.
As a result of the first tranche refinancing, three 2000-built 6,000 TEU ships will become unencumbered. The second tranche of up to $38 million, or 65% of the market value of the vessel to be financed, is available, on similar terms, until May 2020 to facilitate further refinancing. The final maturity date of the new senior loan is expected to be September 2024, five years after drawdown. Borrowings under the new senior loan will bear interest at LIBOR plus a margin of 3.0%. Scheduled amortization is in line with fixed amortization which would have commenced March 2020 under the refinanced loans, at $5.2 million per quarter.
In addition, the company has refinanced all of the existing indebtedness under its junior facility in the amount of $38.5 million, with the only change being to extend its maturity from September 2023 to September 2024, consistent with the maturity date of the new senior loan.
Global Ship Lease owns 40 ships and has contracted to purchase a further ship, ranging from 2,207 to 11,040 TEU, of which nine are fuel efficient new-design wide beam, with a total capacity of 224,162 TEU and an average age, weighted by TEU capacity, of 11.9 years as at June 30, 2019.