American Shipping callable PIK bondholders approve amendment

By Jennifer Chiou

New York, Dec. 17 - American Shipping Co. ASA announced that holders of its senior callable PIK bonds due 2018 voted at a meeting in Oslo to allow for the company's recapitalization plan.

The company said on Dec. 2 that it planned to pursue the recapitalization that includes changes to the terms of its callable PIK senior bonds.

As previously announced, the following changes are to 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.

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

At reported, the proposed recapitalization includes a $120 million private placement of equity.

The private placement requires approval at a shareholder meeting to be held on Dec. 27.

Arctic Securities and Pareto Securities are the company's financial advisers for the recapitalization.

The trustee is Norsk Tillitsmann ASA.

American Shipping is a shipping company based in Oslo.

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