Horizon Offshore completes US$77 million refinancingNews // March 15, 2006
Horizon Offshore in the US has announced that it has entered into a US$77.4 million secured term facility agented by The CIT Group/Equipment Financing (the CIT Group). The credit facility has a five year term and bears interest at LIBOR plus 4.5 pr cent per annum.
The credit facility is payable in monthly installments of US$0.9 million, plus interest, for the first 24 months beginning March 31, 2006 and US$0.6 million, plus interest, for the next 35 months, with the remaining principal and unpaid interest due at maturity in March 2011.
The proceeds from the facility were used to repay the outstanding amount under the Company's previous CIT Group facility maturing in March 2006 and outstanding amount under the US$70 million senior secured term loan facility agented by Manchester Securities Corp maturing in March 2007 and related closing costs and fees.
Amounts outstanding under the new secured term loan facility are secured by mortgages on most of Horizon's vessels and contains covenants, events of default and cross-default provisions customary in financings of this type.
"We are very pleased with the results of our refinancing. It paves the way for us to continue the successful execution of our business plan in light of the substantially improved market conditions we see in the Gulf of Mexico and many of our international operating areas. The new term loan facility eliminates our significant amount of short-term debt and will significantly reduce our interest expense," said David W Sharp, President and Chief Executive Officer. "We believe that our improved capital structure and strong operating performance position us to take advantage of the opportunities we see in our business."