Canadian tanker and bulker owner Algoma Central has refinanced its 2021 debt maturities in deals worth $487m.
The company said new bank and bond agreements will cut its interest costs in "attractive" capital markets.
Algoma said new deals have been completed at "highly favourable terms".
The major portion consists of bonds worth $316m in US dollar and Canadian tranches. These mature between 2027 and 2035, with interest ranging from 3.37% to 4.01%.
The overall effective rate is 3.8%, representing a 1.49 percentage-point reduction compared to the existing notes being replaced.
A group of Canadian and US insurance companies bought the bonds in a sale carried out by RBC Capital Markets.
Earlier notes to be bought back
Proceeds will be used to retire $171m of earlier notes and $71m of bank debt.
Algoma incurred $9m of costs to complete the transaction, including fees, commissions and break costs on the existing facilities.
The shipowner is retaining $65m for future capital expenditure and general corporate purposes.
Toronto-listed Algoma has 38 ships on the water and a handysize bulker newbuilding due from China's Jiangsu Yangzi-Mitsui Shipbuilding in March 2021.
The company, which is based in St Catharines, Ontario, also secured a new revolving loan of $171m with a syndicate of banks led by Canadian Imperial Bank of Commerce and assisted by Bank of Nova Scotia.
Timing was right
"Capital markets have been very attractive recently, presenting an opportunity to reduce our cost of capital and extend the maturity date for our long-term debt, while eliminating refinancing risk that might have arisen had we waited until next year to refinance," Algoma chief financial officer Peter Winkley said.
"We have taken this opportunity to secure significant liquidity under good terms and very attractive pricing, positioning the company well to achieve its objectives and deliver shareholder value."
The new finance is secured against vessels in the fleet.
In the third quarter, the company reported net profit of CAD 22.2m ($17.4m), against CAD 21m in 2019.
