HSH Nordbank Provides Loan for Scorpio Tankers MRs

Scorpio Tankers Monaco-based tanker owner Scorpio Tankers has received a commitment from Germanys HSH Nordbank, one of the worlds biggest providers of shipping finance, for a loan facility to finance its two Medium Range (MR) product tankers. The loan in the amount of up to USD 34 million is expected to be used to refinance the existing indebtedness on the two tankers. Scorpio Tankers said that the availability is expected to be used to finance up to 60% of the fair market value of the vessels. The loan facility is subject to customary conditions precedent and the execution of definitive documentation. It has a final maturity of five years from the first drawdown date and bears interest at LIBOR plus a margin of 2.50% per annum. The remaining terms and conditions, including financial covenants, are similar to those set forth in the companys 2016 Credit Facility, fully drawn in September 2016, and the aggregate proceeds of USD 288 million were used to refinance the existing indebtedness on sixteen MR product tankers. During the third quarter of 2016, Scorpio Tankers recorded a net loss of USD 27.1 million, compared to a net income of USD 85.3 million in the same period last year. The loss is primarily attributed to low Time Charter Equivalent (TCE) revenue that plunged to USD 114 million from USD 227.2 million on the year-on-year basis.