Diana Containerships enters loan agreements with RBS, Diana Shipping
Amendments to the company’s Loan with The Royal Bank of Scotland include the following provisions:
- the prepayment of the amount of $7,606,750 by September 15, 2016;
- a reduction in the first four consecutive quarterly repayment instalments under each Loan tranche, to be repaid ratably over the remaining quarterly instalments, and the deferral of all quarterly repayments until September 15, 2017;
- the creation of a new $8,851,000 tranche out of the reallocation of amounts due under the existing tranches, whose repayment will commence on March 15, 2019;
- a prohibition on the payment of dividends until the later of: (a) prepayment or repayment in full of the Deferred Tranche and (b) September 15, 2018;
- a prohibition on the incurrence of additional indebtedness (with the exception of intra-group debt) or the acquisition of additional vessels until September 15, 2018;
- a reduction in the minimum security covenant from 140% to 125% of the aggregate of the amount of the Loan then outstanding until September 30, 2018;
- the exclusion of the outstanding principal balance of the Diana Shipping Loan from the definition of consolidated debt for purposes of calculating the Net Worth Covenant and the Net Gearing Ratio Covenant of the Loan;
- a change in the interest rate from 2.75% per annum plus USD LIBOR to 3.10% per annum over USD LIBOR from September 12, 2016 until December 31, 2018, thereafter reverting to 2.75% over USD LIBOR until maturity.
In addition, and as a condition to The Royal Bank of Scotland loan amendments, Diana Containerships has also amended its $50 million Diana Shipping Loan to defer its repayment.
The amendment will also change the borrower under the Diana Shipping Loan to another wholly-owned subsidiary of Diana Containerships Inc., and provide for an increase of the interest rate for the period between September 12, 2016 and December 31, 2018 to 3.35% per annum over USD LIBOR. ■