OSA Goliath bond trustee eyes waiver to allow tap issue fund release

By Caroline Salls

Pittsburgh, April 14 – OSA Goliath Pte., Ltd. bond trustee Nordic Trustee ASA is asking holders of the company’s 12% and 15% bond issues to waive a second naval mortgage amendment requirement to allow for the release of new liquidity bond tap issue funds, according to a notice from the trustee.

The trustee said establishment of security over the OSA Goliath vessel is a condition under the liquidity bond agreement for disbursement of the net proceeds of the new tap issue to the company from an escrow account.

However, when a filing was made to have the amendment of mortgage for the vessel registered in Panama to accommodate the new tap issue, the trustee said it was discovered that the Panama Public Registry of Vessels had received a pending request related to the vessel. As a result, no other registrations can be achieved during the request period.

Nordic Trustee said it is unlikely that the process will be finalized before the use of the funds from the new tap issue will be necessary to ensure payment of interest.

According to the notice, OSA’s Panama counsel does not think existing Panama mortgages over the vessel are affected by the pending request.

The amounts currently covered by the existing mortgages are equal to the $272.67 million outstanding on the OSA bonds as of April 14, which excludes the new tap issue.

In accordance with the proposed plan to have the vessel transferred to a Singapore special purpose vehicle through a judicial sale under the jurisdiction of the Bahamas Admiralty Marshal, the proposed sale price will be in exceeds of $242 million, according to the notice.

Since the total amount covered by the mortgages is roughly $30 million more than the sale price of the vessel, the trustee said third parties’ ability to make claims against the sale price is limited.

Under an intercreditor agreement, the liquidity bonds must be repaid in full before any payment can be made on OSA’s senior secured bonds. As a result, the trustee said liquidity bondholders, including the holders of the new tap issue, would receive equal consideration if the vessel is sold as if the naval mortgage had been amended.

The bondholders’ meeting is scheduled for April 28.

OSA Goliath is a subsidiary of Mexico City-based offshore oil engineering services company Oceanografia SA de CV.

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