Frontline gets $1.15 billion of new debt financing in July, August

By Devika Patel

Knoxville, Tenn., Aug. 31 – Frontline Ltd. reported in its second quarter earnings call that it had obtained several debt financings in the second quarter and six months ended June 30.

“In the second quarter we completed the financings from China Exim Bank of $328 million which we announced in the first quarter,” Inger M. Klemp, chief financial officer of Frontline Management AS, said in the company’s earnings call on Wednesday.

“We also secured commitment for a second loan facility with China Exim Bank of $325 million. This facility will be insured by SinoSure and we expect to be in the final stages of obtaining approval from SinoSure.

“The cost on these financings will be Libor plus 180 to 190 basis points and they will have a 15 to 18 year loan profile,” Klemp said. “In addition we have through the quarter secured $220 million of debt financing from ING Bank and Credit Suisse at the cost of Libor plus 190 basis points. These financing have 17, 18 years loan profile.”

Frontline said in a press release that it signed a senior unsecured loan facility of up to $275 million with an affiliate of Hemen Holding Ltd. in June. The loan carries an interest rate of 625 basis points.

In July, Frontline signed a $109.2 million senior secured term loan facility with ING Bank. The facility matures in 2021, carries an interest rate of Libor plus 190 basis points and has an amortization profile of 17 years.

In August, the company signed a $328.4 million senior secured term loan facility with China Exim Bank. The facility matures in 2029, carries an interest rate of Libor plus a margin in line with Frontline’s existing loan facilities and has an amortization profile of 18 years.

Also in August, Frontline secured a commitment for a $324.6 million second facility with China Exim Bank which matures in 2033, carries an interest rate of Libor plus a margin in line with Frontline’s existing loan facilities and has an amortization profile of 15 years.

The company also negotiated a $110.5 million senior secured term loan facility with Credit Suisse in August. The facility matures in 2022, carries an interest rate of Libor plus a margin of 190 basis points and has an amortization profile of 18 years.

“We are very pleased to have secured bank financing of up to $548 million,” Klemp said in a press release. Referring to the China Exim Bank financing, he added: “This new financing will partially finance 20 of our newbuilding contracts at highly attractive terms and we maintain our very low cash breakeven levels”

Frontline’s net income was $14.3 million, or $0.09 per share, for the second quarter of 2016 and $93.2 million, or $0.60 per share, for the six months ended June 30.

Frontline is an Oslo-based oil tanker shipping business incorporated in Bermuda.

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