Genco Shipping & Trading, a U.S.-headquartered dry bulk shipowner focused on the global transportation of commodities, closed a $500 million revolving credit facility.
Key terms of the $500 million revolving credit facility include:
- Borrowing capacity increased to $500 million from $344 million, an increase of $156 million or 46%
- 100% revolving credit facility structure provides flexibility to continue to pay down debt while maintaining the ability to opportunistically draw down capital
- Competitive pricing with margin grid reduced to 1.85% to 2.15% + SOFR from 2.15% to 2.75% + SOFR
- Eliminated credit adjustment spread of approximately 0.11%
- Margin grid based on the ratio of total net indebtedness to EBITDA
- Five-year tenor extends maturity by over two years from August 2026 to November 2028
- Repayment profile of 20 years
- Quarterly revolver commitment reduction of approximately $15 million per quarter
- Genco will have no mandatory debt repayments until 2028, due to our reduction in debt outstanding
- Sustainability linked feature with interest rate increased or decreased by a margin of 0.05% based on our performance relative to fleet-wide carbon emissions targets
- Favorable covenant package in line with our prior facility
“We are pleased to close on this new credit facility and appreciate the continued support of our leading bank group,” John C. Wobensmith, CEO of Genco, said. “The significantly increased lending capacity and full revolving debt structure are consistent with our focus on further enhancing our balance sheet and align well with our comprehensive value strategy. With increased financial flexibility, we expect to continue to pursue opportunistic growth and further advance our fleet renewal strategy while remaining on a pathway towards net debt zero in the medium term. The reduced interest rate pricing and no mandatory debt repayments until facility maturity in 2028 also enable us to maintain our industry-low cash flow breakeven rate, which remains a core differentiator.”
“With this new revolving credit facility we have increased our borrowing capacity by over $150 million, reduced interest costs, and extended our maturity profile, which positions Genco well going forward,” Peter Allen, CFO of Genco, said. “Current revolver availability of $290 million provides Genco with significant optionality to grow accretively, while continuing to delever. Importantly, the 100% revolving structure augments our flexibility to actively manage our debt outstanding and reduce interest expense, while maintaining the same level of borrowing capacity. Once again, we would like to thank our bank group for their continued support throughout the course of this transaction.”
Nordea Bank is acting as coordinator, administrative agent, collateral agent, security trustee, and sustainability coordinator under the facility. Nordea Bank Abp, DNB Markets, Skandinaviska Enskilda Banken AB (PUBL) and ING Bank are mandated lead arrangers and bookrunners, Crédit Agricole Corporate & Investment Bank is a mandated lead arranger and First-Citizens Bank & Trust Company and CTBC Bank are co-arrangers.
Following closing of the facility, the debt outstanding is approximately $210 million and the undrawn revolver availability is approximately $290 million. Potential uses of the revolver are to support growth of the company’s asset base as well as general corporate purposes. Given the 100% revolver structure, the company plans to actively manage its debt outstanding to reduce interest expense while also planning to utilize the revolver as a source of funds to opportunistically acquire tonnage.