Norway’s Ocean Yield has reduced its interest costs by repurchasing part of a hybrid perpetual bond issue.

The sale-and-leaseback shipowner, controlled by US private equity giant KKR, said it had bought back $36.26m of the OCY 06 tranche on 5 June. It bought another $6m on Tuesday.

The company has now repurchased $81.5m of this series, out of a total of $125m.

The price has not been disclosed but the bond has traded in the 103% to 104% of par range so far this year.

Fearnley Securities said these notes form one of the most expensive parts of Ocean Yield’s capital structure at 6.75% above the three-month London interbank rate (Libor) rate.

In March, Ocean Yield added $70m to its cash pile through the sale of a new bond in Oslo.

The unsecured issue was worth NOK 750m ($70.5m).

The notes carry a coupon of the Norwegian interbank rate (Nibor) plus 3.95%.

Net proceeds from the four-year bond issue were due to go towards refinancing outstanding debt and general corporate purposes.

The owner said at the time it could buy back two earlier bond series: the OCY 06 issue and a NOK 750m tranche that expires in December 2024 at Nibor plus 7.25%.

Splashing the cash

Ocean Yield later said it had repurchased NOK 292.5m of the Norwegian issue and $37.7m of the US-denominated perpetual series.

Ocean Yield had already bought back NOK 20m of this second series.

In January, the company said it was splashing more of its cash to redeem a bond issue due in May.

It said it was exercising a call option to buy back the NOK 750m tranche.

The redemption price was at 100% of par.

The bonds carried interest of Nibor plus 3.65%.