Hornbeck Offshore is not done pushing back some of its upcoming debt maturities, the company's chief executive said.
After staving off bankruptcy during offshore's multi-year downturn, the Louisiana-based, New York-listed company has been working out deals to refinance or clear bonds coming due over the next three years — moves enabled by the sector's expected turnaround.
“We are now bridged to a market that’s coming very rapidly," Hornbeck Offshore chief executive Todd Hornbeck told TradeWinds.
This year, the company has either extinguished or refinanced roughly $216.5m in near-term debt, including $73.9m in notes due later this year.
The moves pushed the debt maturities back to either 2023 or 2025.
The company still has $25.8m of the 2019 notes and $224.3m of the 2020 notes on its books.
“We will push that out. We will redo that debt. How that’s going to be done? We’re still in negotiations. I think there’s an opportunity to get this done now that there’s a market," Hornbeck said.
Rebound in demand
Sector-wide, day rates in the North Sea have surged alongside utilisation rates.
Rig counts are forecast to shoot up in West Africa and the Caribbean and Brazil's oil industry is expected to rebound, all positive signs for demand for offshore vessels.
"With the market changing, we now have a different conversation," Hornbeck said.
"Now we can sit down and hopefully get a deal done where we can extend those maturities out or reorganise that debt."
Hornbeck Offshore is unique in the sector as one of the only major players not to declare bankruptcy and reorganise.
Hornbeck said he does not believe that leaves the company at a disadvantage.
“Just because you have less debt, that doesn’t mean you can charge less," he said, pointing out that maritime is a capital-intensive business.
"We have to make a fair return on what the original capital investment was, even the bankrupt companies that have reorganised, to ever have a viable business going forward.
"We have to prove it’s a good investment in the future for a bank or a bondholder or an investor.”
