Item 1.02 Termination of a Material Definitive Agreement.
On November 12, 2021, International Seaways, Inc. ("INSW" or the "Company") and
WLR/TRF Shipping S.a.r.l ("WLR/TRF") competed the dissolution of the NT Suez
Holdco LLC ("NT Suez") joint venture, which prior to the dissolution was owned
51% by the Company and 49% by WLR/TRF, and repaid all outstanding amounts under
a $66 million five-year senior secured term loan facility (the "NT Suez
Facility") previously entered into by NT Suez with the lenders thereunder for
the purpose of financing the two Suezmax tankers controlled by NT Suez. See Item
8.01 for further information.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 8.01 is incorporated by reference into this
Item 8.01 Other Events.
(A) Dissolution of NT Suez Joint Venture, Repayment of Loan and Entry into Credit
On November 12, 2021, the Company and WLR/TRF completed the dissolution of the
NT Suez joint venture, which was originally formed in September 2014 to
purchase two Suezmax newbuildings (the Loire and the Namsen), which
were delivered to NT Suez in the third quarter of 2016. The dissolution resulted
in the distribution of one Suezmax tanker to each partner via a transfer of the
shares of the two vessel-owning subsidiaries of NT Suez. Following the
dissolution, the Company owns all of the interest in NT Suez One LLC, the entity
that owns the Loire and WLR/TRF owns all of the interest in NT Suez Two LLC, the
entity that owns the Namsen.
Also on November 12, 2021, the Company, together with its indirect subsidiaries
Diamond S Shipping Inc. (together with the Company, the "Guarantors") and NT
Suez One LLC (the "Borrower"), entered into a credit agreement (the "Credit
Agreement") for a $25 million term loan facility with ING Bank N.V., London
Branch, as lender, administrative agent, collateral agent and security trustee.
The Credit Agreement is secured by a first lien on the Loire, along with its
earnings, insurances and certain other assets. The full $25 million was drawn
down on November 12, 2021. Interest on the loan is based upon LIBOR plus a
margin of 2% per annum. The loan amortizes in quarterly installments of
approximately $0.5 million commencing in February 2022 and matures on the fifth
anniversary of the borrowing date in November 2026 (with a final balloon payment
due at maturity in an amount equal to the remaining principal amount of the loan
outstanding on that date). The maturity date is subject to acceleration upon the
occurrence of certain events (as described in the Credit Agreement).
The Credit Agreement contains customary representations, warranties,
restrictions and covenants applicable to the Guarantors and their respective
subsidiaries (including the Borrower). These include financial covenants aligned
with the Company's existing senior secured debt facilities, and require, among
other things, that the Company maintain a minimum liquidity level; not exceed a
maximum consolidated leverage ratio; ensure current assets exceed current
liabilities; and ensure the fair market value of the vessel not be less than
135% of the aggregate outstanding principal amount of loan under the Credit
Agreement, in each case as set out in greater detail in the Credit Agreement.
The Company used substantially all of the proceeds of the loan under the Credit
Agreement to repay approximately one-half of the amount outstanding under the NT
Suez Facility (approximately $22 million). The NT Suez Facility had been
scheduled to mature on November 18, 2021. The remaining amount outstanding was
repaid by WLR-TRF. The Company will use any remaining proceeds from the loan
under the Credit Agreement (after fees and expenses) for general corporate
(B) Sale and Leaseback Transactions Relating to Dual-Fuel LNG VLCC Newbuild
On November 15, 2021, the Company and three of its vessel-owning indirect
subsidiaries entered into a series of sale and leaseback arrangements with
entities affiliated with the Bank of Communications Limited ("BoComm") in
connection with the construction of three dual-fuel LNG VLCC newbuild tankers.
The three newbuilds are currently scheduled for delivery during the first
quarter of 2023. BoComm's obligation to provide funding pursuant to the terms of
the sale and leaseback agreements commences once construction begins on the
first vessel in late November 2021. The transactions are ultimately expected to
provide funding of approximately $245 million in aggregate over the course of
the building and delivery of the three vessels. The related bareboat charter-in
lease agreements for the three VLCC tankers run for a period of seven years
beginning on the date on which the vessels are delivered from the yard where
they are being constructed, and include purchase options and other customary
terms and conditions for sale and leaseback transactions.
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