Nordic American Tankers’ new $306m loan with an affiliate of Beal Bank of Texas has an interest rate within the range of 6% to 8%, according to NAT founder and chief executive Herbjorn Hansson.
Hansson provided the estimate in reply to a question from Jefferies equity analyst Randy Giveans on a rare investor conference call this morning.
A previous estimate of the interest had come from BTIG analyst Greg Lewis, who cited an 8% rate in a client note and bumped the number to 8.5% in a subsequent interview with TradeWinds.
Those numbers are significantly higher than what favoured shipowners are able to achieve through traditional ship-finance banks, but also lower than what NAT had been paying on its previous revolving loan (10%) and what it was offered through a DNB "backstop" facility (10.5%).
Hansson chose to emphasise the latter point, and was characteristically colourful in his describing NAT’s new banking partner, which is based outside Dallas and little known within shipping.
"They are very much like ourselves — when people run in one direction, they run in the opposite direction," Hansson said.
As TradeWinds reports this week, the Texas bank is led by Andy Beal, an iconoclastic billionaire who enjoys high-stakes poker, racing sports cars and contrarian bets.
Beal made a fortune cutting back lending during the peak market of 2004 and 2007, then pouncing on distressed business during the world financial crisis that followed.
Beal executives Patrick Cook and Andy Longhurst told TradeWinds this week that they were attracted by NAT’s reliable security in a fleet of 23 suezmax tankers “that we think are run by a great company”.
During NAT’s first investor call in two years, Hansson had kind words for the bank in return.
“This is a first-class bank dominated by a first-class person who is one of richest persons in America,” Hansson said.
“We don’t wish to borrow money from anybody who doesn’t wish to lend us money — we are not willing to (borrow) money from all people.”
A key attraction of the Beal financing is a light covenant structure with 20-year amortisation profile on a five-year maturity, allowing NAT ample elbow room to pay its trademark shareholder dividend, which it has distributed for 86 straight quarters.
Already the $0.04 dividend announced by NAT this week exceeds the $0.03 cap mandated under its previous revolver, which has been retired.
