Odfjell is the first shipowner to test investors' appetite for sustainability-linked bonds (SLBs) in 2021.
The Oslo-listed chemical tanker owner has brought in investment banks DNB Markets, Nordea and SEB to arrange a series of fixed-income calls next week.
Odfjell chief financial officer Terje Iversen told TradeWinds that the cash will go towards paying an $82.5m bond balloon payment due this month.
He added: "We plan to raise [a] minimum NOK 500m, approximately $60m based on [the] current exchange rate."
Odfjell said the sustainability-linked issue will have a term of four years.
Linked to emissions ambitions
The potential bond will be linked to Odfjell's fleet-transition plan and its ambition to reduce the carbon intensity of its ships by 50% by 2030, compared to the 2008 level.
The notes will be listed on the Euronext ESG Bonds list.
Last year, the shipowner said it was confident that it could deal with the looming $82.5m maturity.
The company repaid $50m of a revolving credit facility in July and signed a term sheet for a $50m short-term loan earmarked for the bond balloon payment.
This was in case it did not decide to refinance the issue if terms were unfavourable.
Plenty of cash left
Together with $27m in cash from terminal disposals, and excluding the new bond, the cash balance after paying the maturity would still be $125m.
If the new $50m loan is added in, that figure rises to $175m.
Iversen told analysts on a conference call in August: "Our game plan is still to refinance that bond before maturity if we find the terms acceptable or favourable to Odfjell. But we have built contingency."
The shipowner said it continued to see "strong interest from existing and new financing lenders".
"Upcoming and other early refinancing projects are progressing as planned, and we are building liquidity reserves to strengthen our balance and increase flexibility in our capital structure," Odfjell said.
There are no other debt maturities before the second quarter of 2022.
