Norway's Odfjell has revealed how it is planning to pay a big bond maturity next year if a new issue proves impossible to sell.
The chemical tanker owner said it could raise money against debt-free ships to meet the payment due in the first three months of 2021.
Chief financial officer Terje Iversen told TradeWinds it owes $82.5m on the bond.
It has been drawing up plans in case the bond market remains "more or less" closed due to the turmoil in financial markets caused by the coronavirus pandemic, the company said.
Compatriot Ocean Yield has also said the market is shut currently.
Iversen said on a conference call with analysts that pricing is also "quite high" compared to historical levels.
"We have some unencumbered vessels that we are looking into and possibly draw some loans on those," he added.
"We also have vessels in our fleet with quite low loan-to-values, which we can refinance early and then draw up additional funds, and we are also considering having in place a bridge-to-bond."
Well positioned
Iversen continued: "We also have available securities when it comes to our terminal assets and so on."
A bridge-to-bond facility is a type of financing where the buyer requires the certainty of a fully committed financing package, which can be replaced in the future with a mid- to long-term high-yield bond issue.
"We think we are quite well positioned to take care of that bond maturity in a situation when bond markets appear to be closed," Iversen added.
Debt will increase this year due to four newbuildings entering the fleet and Odfjell's focus is on cutting debt costs.
Net interest-bearing debt at the end of the first quarter was $1.02bn, compared to $1.03bn three months before.
Chemical storage quiet
Chief executive Kristian Morch was asked about inquiries from charterers for storage on chemical tankers.
He said: "We have seen some floating storage requests, but it's very few. We've seen some requests for mixed chemicals based in the Middle East.
"But in general the big storage push is in clean products and that draws the tonnage away from our markets, but we don't have any of our fleet in floating storage. Not a massive impact directly but indirectly."
Morch said none of its crews has been infected with Covid-19, but it has been difficult getting inspectors and spare parts on board.
There has been one Covid-19 case at its office in Brazil, but the employee was discharged from hospital on Thursday.
"It's difficult to find any flights going anywhere, so people have to stay longer onboard and crew waiting at home cannot go," Morch said.
"It's a problem the world has to solve soon because it's not sustainable that we don't get crew changes."
