International Seaways agrees refinancing deal
The implementation of the Poseidon Principles, which tie lending to the shipping industry to the climate agenda, appears to be gaining momentum as the Lois Zabrocky-led firm has secured new facilities whose price will be linked to its fleets emissions. Aside from the $340m, International Seaways will receive another $50m facility as part of a move to repay $385m of existing debts
The tanker owner revealed a pricing mechanism in new loans that will be related to the carbon efficiency of its fleet and global decarbonisation targets
INTERNATIONAL Seaways has secured $390m in new financing in a bespoke deal whereby the loans are linked to fleet emissions performance.
The US-based owner of more than 40 tankers said that $340m of the $390m will be attached to a sustainability-linked pricing mechanism that has been certified by an independent firm as complying with sustainability-linked loan principles.
“The adjustment in pricing will be linked to the carbon efficiency of the INSW fleet as it relates to reductions in CO2 emissions year-over-year, such that it aligns with the International Maritime Organization’s 50% industry reduction target in GHG emissions by 2050,” the company said in a statement.
International Seaways said the move is in line with the de-carbonisation trajectory set out in the Poseidon Principles, the initiative launched by major ship lenders in 2019 which links financing to shipping companies with the emissions performance of their fleets and the decarbonisation targets set by the IMO.
With the recent additions of BNP Paribas and Credit Suisse, the Poseidon Principles enjoy overwhelming support from western banks. Participants hope key Asian lenders will sign up soon.
International Seaways has claimed it is the first New York-listed shipowner or operator to have such a sustainability pricing mechanism tied to its financing.
An independent organisation approved by each ship’s flag state will validate the data used to calculate their carbon efficiency. ABN Amro will act as sustainability co-ordinator.
“We intend to continue to focus on our ESG footprint where appropriate and align our sustainability goals with those of our various stakeholders,” International Seaways chief executive Lois Zabrocky said in a statement.
This sustainability-linked $340m consists of a five-year $300m senior secured term loan facility and a five-year $40m revolving credit facility.
The remaining $50m is a two-and-a-half year senior secured term loan credit facility.
Nordea, ABN AMRO, Crédit Agricole, DNB and SEB acted as mandated lead arrangers and bookrunners, while Nordea was the administrative agent.