Ship Finance International, the New York-listed company that invests in ships it charters out to third parties on long-term contracts, has raised NOK500 million (USD58 million) in three-year notes.
The company placed the senior secured notes that carry a coupon of Norwegian Inter-Bank Offered Rate (NIBOR) plus 4.75% with investors and it plans to seek listing of the notes on the Oslo bourse. The proceeds would be used to refinance existing indebtedness, Ship Finance said.
The company has NOK600 million worth of five-year bonds due to mature later this year. They are listed in Oslo and traded at 100.6 at the close of business on Friday.
The placement comes about three weeks after Bonheur ASA, the listed holding company whose business ranges from offshore services and cruise ships and which is controlled by the Fred. Olsen family, raised NOK500 million in a private placement of bonds. Shipping companies have now raised about NOK3.0 billion on the Oslo market through bonds and notes so far this year.
The market remains open to companies whose existing debt trades at close to its face value or above it. However, in the case of many offshore services companies, the pricing of their debt has fallen well below par, which would mean that raising new funds through bond issues would become very expensive.
Since the sharp fall in the price of oil, many offshore services companies have been forced to seek the restructuring of their finances as they have been unable to refinance existing bond loans.
This situation was one of the factors behind the three-way merger of Solstad Offshore, Farstad Shippjng, and Deep Sea Supply, three Oslo-listed offshore services vessel owners.
Bondholders have in many efforts to restructure finances of offshore services companies rejected plans proposed to them, among other stakeholders, which often have included extension of maturity of debt or converting debt to equity.
Contact Kari Reinikainen at firstname.lastname@example.org