Energy transportation services provider and tanker company Overseas Shipholding Group (OSG) closed a five-year $325 million term loan credit facility with Prudential Financial subsidiary Prudential Insurance Company of America and other syndicate lenders.
In connection with the new facility, the company concurrently amended its $75 million secured asset-based revolving loan facility with Wells Fargo by reducing the maximum credit line available and extending the term through August 2, 2019.
The amendment also reduced the number of vessels serving as collateral for the on the ABL facility.
As for the new loan facility, OSG’s subsidiary, Overseas Bulk Ships and certain of its subsidiaries will use it to refinance and replace its existing term loan facility with administrative agent Jefferies Finance and certain other lenders.
The new term loan will bear interest at an annual rate equal to the prevailing 30-Day LIBOR plus a margin of 500 basis points and are secured by the issued and outstanding stock of OBS. The performance of the borrowers’ obligations under the term loan is guaranteed by OSG and certain other assets.
The term loan agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the various loan parties and their respective subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions.
Upon the closing of the new term loan, the OBS term loan was terminated.
