Norway’s Boa gets OK to cut PIK interest to 2%, change call premiums

By Susanna Moon

Chicago, Jan. 7 – Boa OCV AS obtained holder approval to reduce the pay-in-kind interest under its senior secured bond issue 2014/2019.

The written resolution was passed on Thursday with the required majority under a proposal dated Dec. 21, according to a notice by Nordic Trustee AS.

“The issuance of additional bonds increases the principal amount with an accelerating effect, which under the current market conditions will make it unlikely that the full amount owed at the maturity date will be capable of being repaid,” according to a previous notice by Nordic Trustee ASA.

The issuer therefore suggested, “in consultation with the majority of the bondholders,” to lower the compounding interest element reflected in the PIK interest to 2% from 9.75% as well as to adjust the mandatory redemption premium as follows:

• At 101.95% instead of 101.5% until the interest payment date on Jan. 7;

• At 103.95% instead of 101.5% from the interest payment date on Jan. 7 until the interest payment date on April 7;

• At 106% instead of 100.5% from the interest payment date on April 7, 2019 until the interest payment date on July 7, 2019;

• At 108% instead of 100.5% from the interest payment date on July 7, 2019 until the interest payment date on Oct. 7, 2019;

• At 110.3% instead of 100.5% from the interest payment date on Oct. 7, 2019 until the interest payment date on Jan. 7, 2020;

• At 112.5% instead of 100.5% from the interest payment date on Jan. 7, 2020 until the interest payment date on April7, 2020;

• At 114.8% instead of 100.5% from the interest payment date on April 7, 2020 until the interest payment date on July7, 2020;

• At 117.2% instead of 100.5% from the interest payment date on July 7, 2020 until the interest payment date on Oct. 7, 2020; and

• At 119.45% instead of 100.5% from the interest payment date on Oct. 7, 2020 through Dec. 30, 2020.

Also, a new profit split will be included so that a preferred profit split amount will be paid from the maturity date by the issuer to the bondholders in an amount equal to NOK 230,955,781 with the addition of interest of 14.75% per year compounded quarterly from the maturity date.

The amount will be payable 14 banking days after a capital event, which will mean any refinancing of the bond, the sale of any of the vessels or any corporate activity resulting in a change-of-control event.

The preferred profit split amount will be limited in the event of a sale of a vessel or a change-of-control event to an amount equal to the asset value of the issuer after repayment of PIK interest and the outstanding bonds. The valuation will be based on the sales price of the vessel and any additional assets of the issuer less costs in direct connection with the sale of the vessel.

The terms will also be amended so that at maturity all the outstanding bonds will be repaid at par.

To pass, the resolution requires votes from a two-thirds majority before 10 a.m. ET on Jan. 11.

For more information, e-mail mail@nordictrustee.no or fax +47 22 87 94 10.

Boa owns and charters offshore construction vessels and is based in Trondheim, Norway.

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