Star Bulk Carriers made headlines this quarter with back-to-back fleet buys that took in 31 vessels, but the Greek owner was also busy behind the scenes rejigging its debt financing.
Star Bulk quietly refinanced all of its debt maturities coming due in 2018 and 2019, striking deals with five lenders for more than $550m in fresh loans.
Details are spelled out in the company's quarterly earnings report recently filed with US securities regulators. All five deals were signed within April and May.
The refinancings push out maturities by up to three years and are expected to reduce interest expenses by $2.4m per year.
In April, Star Bulk agreed a $30m loan with National Bank of Greece that was used to refinance the remaining $34.76m balance on a $120m facility provided by German lender Commerzbank, which has shuttered its shipping business.
The loan matures at the end of 2022. Loan margins were not disclosed for this or any of the refinancings.
Star Bulk sealed a bigger loan in April through a $310m facility with DNB Bank. A $240m tranche refinanced remaining portions of earlier loans of $87m from ABN Amro; $228m from the trio of DNB, Skandinaviska Enskilda Banken and Export-Import Bank of China; $120m from DNB; $39m from Deutsche Bank and $30.8m from ABN Amro.
A second tranche with the remaining $70m is earmarked as working capital.
Also in April, Star Bulk agreed with ING Bank a $45m lending to refinance the $45m still outstanding under an original $85m loan from Deutsche Bank.
The April deal saw Citibank provide $130m, with $65.2m going to refinance its own earlier facility. The remaining $64.8m will be used to refinance the existing debt on five bulkers from within the fleet of Augustea Holding.
Star Bulk acquired 16 units from the Italian owner in April for 10.5 million shares in the New York-listed owner. The company also took on a total of $310m in outstanding Augustea debt.
Finally, Star Bulk in May agreed with Credit Agricole a $43m loan used to refinance the outstanding balance of an existing $70m facility with the French lender.
Another lending disclosure reveals the extent to which Star Bulk has returned to profitability.
The Petros Pappas-led shipowner said it paid $30m to its lenders in the first quarter under “cash sweep” arrangements that it accepted as a condition of earlier modifications to its credit lines.
It also paid an additional $4.07m under those agreements owing to what Star Bulk called “improved market conditions”.
The company posted its second straight profitable quarter in the first three months of the year, generating net income of $9.9m.
