Torm has won an 8.25% fixed coupon rate on $200m in five-year unsecured bonds that will partly finance its acquisition of five LR2 tankers.
The Danish product tanker giant announced on Thursday that the bonds due on 25 January 2029 were issued after a tender found “strong global investor interest” and was “significantly oversubscribed”. Torm will apply to have the notes listed on the Oslo Stock Exchange.
The vessels financed fall within the eight LR2s acquired from SKS Greentankers Holding, a joint venture owned by Norway’s Kristian Gerhard Jebsen and Hayfin Capital, in November for an en-bloc price of $399m.
Towards the end of 2023, Torm obtained a commitment from six relationship banks for a bridge facility of $165m for five vessels. The facility was undrawn as of 31 December.
Torm said in Thursday’s statement that it would use bond proceeds to fully repay the bridge loan and for general corporate purposes.
Danske Bank, DNB Markets, Nordea and SEB acted as joint bookrunners for the bond issue.
Torm announced the commencement of the bond tender on Monday.
The Copenhagen and New York-listed owner said the acquired ships were all built at Hyundai Samho Heavy Industries between 2010 and 2012 and have fuel-efficient eco specifications.
At the time of the deal, which was partly financed through shares issuance, chief executive Jacob Meldgaard talked about the impact on Torm’s fleet profile.
“We are pleased with this opportunity to increase our exposure to the LR2 segment, as we see strong demand drivers in this segment in the coming years,” he said.
“As always, we focus on the expected return on capital invested and we believe that it is value accretive and particularly interesting for our shareholders to use issuance of new shares as part of the consideration.”
