American Shipping seeks approval to change terms of PIK bonds due 2018

By Angela McDaniels

Tacoma, Wash., Dec. 2 - American Shipping Co. ASA plans to pursue a recapitalization that includes changes to the terms of American Shipping ASA's callable PIK senior bonds, according to a company news release.

The following changes would be made to the bonds under the proposed recapitalization:

• The company would gain a prepayment option;

• The coupon would be paid half in kind and half in cash instead of entirely in kind, with an increase in the cash interest portion after the company's credit facility is refinanced;

• The denomination of the bonds would be changed to dollars from Norwegian kroner;

• The interest rate would be changed to Libor plus 600 basis points from Nibor plus 475 bps;

• The dividend restrictions would be relaxed; and

• The company would gain an option to extend the maturity to Feb. 28, 2021 from Feb. 28, 2018.

Bondholders will vote on the proposed changes at a meeting.

In order to pay cash interest on the bonds and to add the prepayment option, the company also needs to reach an agreement with the lenders under its credit facility due June 2016, of which BNP Paribas SA is the agent.

The proposed recapitalization will also include a $90 million to $120 million private placement of equity.

The private placement is subject to approval at an extraordinary general meeting of shareholders that is expected to be held on or around Dec. 27. The bondholder meeting will take place sometime before the extraordinary general meeting.

Arctic Securities and Pareto Securities are acting as the company's financial advisers in connection with the recapitalization.

American Shipping is a shipping company based in Oslo.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.