Euronav NV (NYSE EURONEXT: EURN) issued 7-year bonds for the amount of $235 million as part of the acquisition of 15 VLCC (very large crude carriers) from the company of Maersk Tankers Singapore Ltd. for a total amount of $980 million. Euronav has already signed a commitment letter for $500 million senior secured credit facility with Nordea Bank Norge ASA, DNB Bank ASA, and Skandinaviska Enskild Banken AB.
The 7-year-bonds are issued to enhance the equity to the investors that participated in the capital increase of $350 million.
Bonds were issued at 85% of their principal amount, at 5.95% bare interest rate per year, which will be paid semi-annually in arrears. Interest rate of the 7-year bonds is going to increase 8.50% per year for the 2nd and 3rd year and is also going to increase again to 10.20% per annum from the year 4 until maturity. Euronav also announced that the 7-year bonds are redeemable by them at any time.
The credit facility is going to be consisted of $500 million term loan for buying the 15 Very Large Crude Carriers of Maersk Tankers Singapore. The credit agreement signed in equal part by Nordea Bank Norge ASA, DNB Bank ASA, and Skandinaviska Enskild Banken AB is currently being syndicated. After the syndication process closes, which usually takes 4-5 weeks, the credit facility will have 6-year maturity. Borrowings that are under the credit facility are going to bear interest at a rate, which will be based on the LIBOR plus a margin.