Rickmers Trust Management Pte. Ltd. (“RTM” ), the Trustee - Manager of Mainboard - listed Rickmers Maritime , today successfully issued S$100 million (approximately US$80 million) of three - year notes bearing a fixed interest rate of 8.45 % per annum with a maturity date of 15 May 2017, the company said in its press release.
The Issuance marks the maiden drawdown from the Trust’s S$300 million multicurrency medium term note programme. Of the net proceeds from the Issuance, US$25. 6 million will be used to fund repayments of secured bank loans , following which the value - to - loan covenant waiver will be extended from 29 December 2014 to 31 December 2015.
An amount of US$39.2 million of the Net Proceeds will be used to fully prepay the US$49.0 million convertible loan owed to Polaris Shipmanagement Co. Limited (“Polaris”) , at a 20% discount. The convertible loan is repayable over 10 quarterly instalments 1 of US$4.9 million with a step - up interest rate that would have climbed from US$ LIBOR + a margin of 3.0% per annum 2 to US$ LIBOR + a margin of 4.5% per annum over six quarters . Following discussions, Polaris agreed to accep t US$39.2 million as full and final settlement of the convertible loan. Th is early repayment is expected to result in the Trust recognising a gain of approximately US$1 1 million in the second quarter of 2014. The balance of the Net Proceeds will be used to finance the working capital requirements of the Trust and its subsidiaries.
The amount owed by to Polaris i s to be repaid in 10 quarterly instalments, with the first instalment due and payable on the earlier of (a) 1 February 2015; and (b) the last day of the calendar quarter following the date the t rust e xit c onditions are fulfilled, provided always that no repayment shall be made earlier than 30 June 2014 .
Represent ing a relatively small portion of Rickmers Maritime ’s overall debt, the Issuance will lead to an increase in the Trust’s weighted average cost of debt by one percentage point, or from the existing of 2% per annum to 3% per annum (excluding interest rate swap costs) . The I ssuance was led by DBS Bank Ltd. and The Hongkong and Shanghai Banking Corporation Limited , which were appointed to act as joint arrangers and dealers of the P rogramme . BNP Paribas , Singapore Branch also acted as co - manager for the Issuance.
The Programme was established on 19 November 2013, to further diversify Rickmers Maritime's access to funding across various sources, and to better position the Trust to capitalise on growth opportunities as and when they occur. End This press release should be read in conjunction with Rickmers Maritime’s announcement titled “Establishment of S$300,000,000 Multicurrency Medium Term Note Programme Issue of S$100,000,000 in Aggregate Principal Amount of 8.45 per cent. Notes due 2017 und er the S$300,000,000 Multicurrency Medium Term Note Programme” , released via SGXNet on 1 5 May 2014 .