Okeanis Alafouzos-led owner seals $31.11m credit facility to buy back suezmax

Ioannis A. Alafouzos-led Okeanis Eco Tankers, a US and Oslo Børs-listed owner of 14 modern tankers, is buying back a suezmax vessel from its current sale and leaseback financier. The owner sealed a new $31.11m senior secured credit facility to finance the option to purchase back the vessel “Poliegos.”

The move opens “new opportunities” for the company in the future, and “adds diversity and flexibility to our debt financing options”, its chief financial officer, Iraklis Sbarounis, said in a statement on Thursday.

The new facility is provided by Bank SinoPac and the transaction is expected to close in July 2024.

As reported, it contains an interest rate of Term SOFR plus 160 basis points, matures in six years, and will be repaid in quarterly instalments of approximately $0.78m each, together with a balloon instalment of approximately $12.44m payable at maturity.

The Poliegos new facility is secured by, among other things, security over the Poliegos, and is guaranteed by the company.

Since June 2023, Okeanis has refinanced its entire fleet, except for the two VLCC vessels that are financed through sale and leaseback facilities, and whose purchase options are not initially exercisable by the company until the first half of 2026.

Iraklis Sbarounis, chief financial officer of the company, said: “We are very pleased to announce this transaction that marks an important milestone in our continuous efforts to improve our capital structure, with a significant reduction in pricing compared to the vessel’s previous sale and leaseback financing.

“We have strategically targeted setting foot in this new financing market and are satisfied to enter into our first transaction. We believe it may open new opportunities for us in the future, and adds diversity and flexibility to our debt financing options, especially considering the challenges that may start affecting part of the more traditional ship financing markets due to the implementation of the Basel IV banking reforms.

“We have strong relationships with and access to multiple Asian financing markets that we believe tactically and effectively complement our mix of financiers.

“Since June 2023, we have refinanced our entire fleet, except for our two VLCC vessels that are financed through sale and leaseback facilities and whose purchase options are not initially exercisable by us until the first half of 2026.

“With respect to the remaining twelve vessels that have been refinanced, we have significantly improved pricing, extended maturities, added flexibility, and accessed new financing markets.

“Indicatively (and also taking into account the transition of the benchmark interest rate from LIBOR to SOFR in 2023), we have reduced the applicable pricing on our banking debt on these vessels (the principal of which is more than $550 million), on a weighted basis, by approximately 125 basis points. Furthermore, we have extended maturities staggered between 2028 and 2031.

“We look forward to continuing working with our financiers to source the best refinancing options for the Nissos Rhenia and the Nissos Despotiko in 2026, or if the opportunity arises for other accretive deals.”