Old Hill Partners provided a $16.6 million senior secured term loan to a trader and distributor of petroleum products with business in the Middle East, Africa, and Asia. The loan was secured by a senior mortgage on a very large crude carrier (VLCC), a supertanker with approximately 2 million barrels of capacity. The loan was also supported by the assignment of a time charter equal to the loan term.
“We operate in a segment of the lending market that requires specialized knowledge and that is being avoided by large traditional banks due to regulatory constraints. The firm’s experience in the asset-based lending (ABL) sector allowed us to execute on a transaction that offered a flexible financing solution for the borrower that is not available from traditional lenders. We worked very closely with the borrower to craft a custom transaction, secured by strong collateral, that aligned the interests of all involved,” Sam Adams, portfolio manager at Old Hill Partners, said. “We liked this deal in particular because of the employment of the vessel for floating storage for operations not for the contango trade, and because of the favorable ratio of loan-to-scrap value during the term.”
Old Hill Partners, founded by John Howe, is an alternative asset manager focused on asset-based lending transactions with small- and medium-sized businesses. Historically, Old Hill provides asset-based lending solutions for borrowers seeking $5 million to $35 million in financing.