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Hoegh holders OK amending notes to allow new floating units, dividends
By Susanna Moon
Chicago, Dec. 15 – Hoegh LNG Holdings Ltd. said holders approved amendments to its senior unsecured callable bond issue 2012/2017.
As previously announced, the company sought amendments that allow it to acquire additional floating storage and regasification units and to pay dividends.
The bondholders meeting was held at 7 a.m. ET on Dec. 15. The meeting was announced on Dec. 1.
The company previously said that the bonds prevent it from ordering more than one additional floating storage and regasification unit but that it would like to order two more. A delay in ordering an additional unit will likely lead to the loss of delivery slots and higher prices, reducing Hoegh’s ability to pursue new business opportunities.
Enough equity has been raised to fund the additional units but the capital incurrence test in the bond agreement is restrictive. The company asked holders to amend this provision.
Hoegh operates four LNG transportation vessels, five floating storage and regasification units and has two more floating storage and regasification units under construction.
In addition, the company said that equity markets are “increasingly paying attention to dividend policies and restrictions.”
However the retrospective net profit test in the bond agreement prevents it from paying dividends.
Hoegh sought to amend this test to give it more flexibility, allowing it to pay dividends up to a defined amount each year. In exchange, it will give up the flexibility to pay more than the defined amount.
The company described the changes as “broadly credit-neutral.”
The consent fee was 85 basis points.
Hoegh LNG is a Norwegian liquefied natural gas shipping company. The holding company is based in Hamilton, Bermuda.
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