Hoegh LNG Holdings is cutting its financial costs with a new revolving credit facility worth $80m as it eyes up a new bond issue.
The Oslo-listed LNG vessel owner said the cash is secured by common units of spin-off Hoegh LNG Partners.
Three of its existing banks, which it did not name, are providing the facility, which will mature over two years at interest estimated at 5.2% per year based on current floating rates.
The deal will refinance part of Hoegh LNG's $130m HLNG02 bond expiring in June, and will also be used for general purposes.
The company also said it is hoping to sell a new five-year bond in Oslo, subject to market conditions.
It did not reveal a target amount, but said Danske Bank, DNB Markets, Nordea, Swedbank and ABN AMRO are arranging a series of fixed-income investor meetings this week.
If it sells the debt, it may buy back the HLNG02 bonds in part or in full, at the prevailing call price of 101% of par value.
CEO Sveinung Stohle said the deal proved the importance of its "strong and long-lasting relationship" with its core lenders.
"The facility provides Hoegh LNG with flexible financing, in line with the company's financial strategy, while at the same time reducing the financial costs."
The stock was up 0.6% in Oslo to NOK 33.50 ($3.77) on Tuesday.
Returned to profit
Hoegh LNG returned to the black after a strong third quarter that saw its results recover from a series of expensive dry dockings earlier this year.
The owner of floating storage and regasification units (FSRUs) posted net profit of $3.2m for the three-month period, just under half of what it recorded during the same quarter of 2018.
But Hoegh LNG Partners, the New York-listed master limited partnership sponsored by Hoegh LNG, saw its third quarter results hit by lower income from joint ventures.
Having booked unrealised losses on derivative instruments, the ventures that own the FSRU Neptune (built 2009) and Cape Ann (built 2010) booked earnings of $600,000 in the third quarter compared with $4m in the same period of 2018.
The spin-off posted net profits of $10.2m in the third quarter, a drop from $16.6m a year earlier. It recorded operating income of $23.4m in the period, a decline from $28.7m a year before.
However, if the impact of derivatives was excluded, the partnership’s net profits would have only decreased by $300,000 year-on-year to $15.9m.
