Performance Shipping, a US-listed tanker owner, is busy arranging sale-and-leaseback finance for all three LR2 newbuildings it has under construction in China.
The Andreas Michalopoulos-led company said in a statement that it has concluded a $44.25m deal with an unidentified Japanese leasing house for the first newbuilding it contracted back in March 2023.
The sale-and-leaseback deal has a duration of eight years from the ship’s delivery by China Shipbuilding Trading Company (CSSC) in the fourth quarter of 2025.
The bareboat charter rates agreed are equivalent to 96 monthly instalments of $7,132 per day and a balloon payment of about $23.7m payable at the end.
According to Performance, this implies an interest rate of Term SOFR plus 2.425% per annum.
The transaction with the Japanese leasing house has helped Performance “open up valuable new financing opportunities … in Asian markets,” Michalopoulos said.
As a result, “advanced discussions” are already underway with lessors for the company’s two other LR2 newbuildings, Michalopoulos added.
The $44.25m sale-and-leaseback deal for the first vessel finances most of the $53.8m that Performance still has to pay for the tanker.
The ship has cost $63.25m in total. The other pair of LR2s that Performance added to the CSSC order in December last year cost a little more at $64.8m each.
Every angle covered
Their value has considerably appreciated since, amid soaring product tanker markets.
Performance has furthermore covered about 90% of the newbuilding price with the help of a lucrative chartering deal with Clearlake Shipping. The charterer will employ the tankers for at least five years at $31,000 per day.
Clearlake has the option to extend the charters for a sixth and seventh year at a base rate plus profit share.
The sale-and-leaseback deal announced by Performance for the first ship on 16 July “provides the company with a high advance rate at a very attractive cost,” Michalopoulos said.
Performance has continuous options to repurchase the vessel at pre-determined rates, after the second year of the bareboat charter.
In May, the company added a fourth, smaller, newbuilding to its orderbook in the shape of a scrubber-fitted 75,000-dwt LR1 vessel contracted with China's Jiangsu Yangzijiang Shipbuilding Group for $54.1m — excluding extras and net of commission to third parties.
