Item 1.01 Entry into a Material Definitive Agreement.
On December 30, 2019, International Seaways, Inc. (the "Company") entered into a
commitment letter with Nordea Bank Abp, New York Branch ("Nordea"), ABN AMRO
Capital USA LLC ("ABN"), Crédit Agricole Corporate & Investment Bank ("CACIB"),
DNB Capital LLC ("DNB") and Skandinaviska Enskilda Banken AB (PUBL) ("SEB") with
respect to up to $380 million of senior secured credit facilities (the
"Facilities"), consisting of a 5-year senior secured term loan facility in an
aggregate principal amount of up to $300 million (the "Core Term Loan
Facility"), a 5-year revolving credit facility in an aggregate principal amount
of up to $40 million (the "Core Revolving Facility"), and a 2.5-year senior
secured term loan credit facility in an aggregate principal amount of up to $50
million (the "Transition Facility"), with the aggregate principal amount under
the Facilities not to exceed $380 million. Pursuant to the commitment letter,
each of Nordea, ABN, CACIB, DNB and SEB (or their respective affiliates) will
act as a mandated lead arranger and bookrunner, and may arrange a syndicate of
lenders with respect to a portion of the Facilities. Nordea will act as
administrative agent. The proceeds from the Facilities will be used to refinance
in full certain existing secured and unsecured debt of the Company and its
subsidiaries, including the repayment of the Company's 2017 Term Loan Facility
with an outstanding balance of approximately $331.5 million as of December 31,
2019; the repayment of the Company's senior secured credit agreement with ABN
dated as of June 7, 2018, as amended, with an outstanding principal balance of
approximately $23.2 million as of December 31, 2019; and the repurchase of the
Company's 10.75% subordinated notes due 2023 issued pursuant to an indenture
dated June 13, 2018 with GLAS Trust Company LLC, as trustee, as amended, with an
outstanding principal balance of approximately $27.9 million as of December 31,
2019.
Borrowing under the Core Term Loan Facility and the Core Revolving Facility will
initially accrue interest based on LIBOR plus an initial margin of 2.60%, while
borrowings under the Transition Facility will initially accrue interest based on
LIBOR plus an initial margin of 3.50%. The margin on the Core Term Loan Facility
and the Core Revolving Facility will be subject to a reduction or increase of
0.20%, based on whether the Company meets certain leverage ratios. The Company
currently anticipates that the margin on those facilities will be decreased by
0.20% starting during the third quarter of 2020. The Company will also be
required to pay certain structuring and arrangement fees, commitment, legal and
administrative fees. The commitment letter also provides that the Facilities
will be secured by certain of the Company's vessels and certain other specified
assets, and will contain customary representations, warranties, restrictions and
covenants applicable to the Company (including financial covenants relating to
minimum liquidity, maximum leverage, minimum working capital and an interest
coverage ratio, which are substantially similar to the financial covenants in
the Company's remaining secured debt facility).
The commitment letter provides, among other things, that the closing of the
Facilities is subject to conditions customary to similar transactions, including
the completion of documentation satisfactory to the Company and the lenders and
customary diligence investigations. The Company anticipates entry into the
Facilities on or before February 15, 2020, subject to satisfaction of the
conditions precedent in the commitment letter; if the Company has not entered
into definitive documentation by that date, the commitment letter will terminate
unless the parties agree to an extension.
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