Island Offshore in breach of covenants; restructuring talks ongoing

By Caroline Salls

Pittsburgh, May 11 – Island Offshore Shipholding, LP ‘s bond trustee said defaults have occurred on its tranche A senior unsecured callable bond issue 2013/2018 and tranche B senior unsecured callable bond issue 2013/2019 as a result of covenant breaches.

According to a notice released by bond trustee Nordic Trustee ASA, Island Offshore has breached covenants under the bond agreements and some secured loan agreements.

In addition, Nordic Trustee said the company is in restructuring negotiations with its secured finance providers with the goal of continuing as a going concern.

According to the notice, any restructuring solution is expected to involve bond agreement amendments and, as a result, would be subject to bondholder approval.

In light of the restructuring negotiations, the trustee said it has not declared the bonds in default. However, it reserved the right to do so at any time.

The vessel investment company is based in the Cayman Islands.

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