Greek tanker owner Performance Shipping, led-by chairperson of its board Aliki Paliou, has secured a sale and leaseback agreement for its newbuild LR1 tanker.
The company entered into an agreement, through a separate wholly-owned subsidiary, with an unaffiliated third party for its newbuild LR1 tanker, to be named P. San Francisco, currently under construction at Jiangsu New Yangzi Shipbuilding and scheduled for delivery in early 2027.
According to the company, the bareboat financing amount totals $37.8m. As part of this agreement, the vessel will be sold and then chartered back to the company on a bareboat basis for a ten-year period starting from delivery from the shipyard.
The bareboat charter includes 120 monthly installments equivalent to $5,451 per day, Performance Shipping said, with an implied interest rate of Term SOFR plus 2.00% per annum.
Additionally, a balloon payment of approximately $18.1m will be due together with the last installment.
The company said it has continuous options to repurchase the vessel at predetermined rates following the second anniversary of the bareboat charter.
Andreas Michalopoulos, chief executive officer of Performance Shipping, stated: “We are pleased to announce the new financing arrangement for our LR1 newbuilding, secured almost one year ahead of the vessel’s expected delivery date.
“The financing represents 70% of the vessel’s contract price and an even lower leverage level when considering current market values for modern LR1 newbuilding tankers, while maintaining a conservative cashflow breakeven level of US$22,200 per day.
“As previously announced, the vessel has been chartered to Mercuria Energy Trading S.A. for a firm period of four years upon delivery, at a daily gross charter rate of US$23,750, providing coverage above the vessel’s daily cashflow breakeven, with options to extend the charter for up to three additional one-year periods. This financing is consistent with our strategy of fleet renewal, fleet deployment and balanced financial management.”
