Diana Containerships (DCIX) Enters Amended Loan Agreements with RBS, Diana Shipping
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Diana Containerships Inc. (Nasdaq: DCIX) announced that it has amended its US$148 million loan agreement with The Royal Bank of Scotland plc dated September 10, 2015 (the “Loan”) and its US$50 million loan agreement with Diana Shipping Inc. (NYSE: DSX) dated as of May 20, 2013 (as subsequently amended, the “Diana Shipping Loan”).
Amendments to the Company’s Loan with The Royal Bank of Scotland plc include the following provisions:
- the prepayment of the amount of US$7,606,750 by September 15, 2016;
- a reduction in the first four consecutive quarterly repayment instalments under each Loan tranche, to be repaid ratably over the remaining quarterly instalments, and the deferral of all quarterly repayments until September 15, 2017;
- the creation of a new US$8,851,000 tranche (the “Deferred Tranche”) out of the reallocation of amounts due under the existing tranches, whose repayment will commence on March 15, 2019;
- a prohibition on the payment of dividends until the later of: (a) prepayment or repayment in full of the Deferred Tranche and (b) September 15, 2018;
- a prohibition on the incurrence of additional indebtedness (with the exception of intra-group debt) or the acquisition of additional vessels until September 15, 2018;
- a reduction in the minimum security covenant from 140% to 125% of the aggregate of the amount of the Loan then outstanding until September 30, 2018;
- the exclusion of the outstanding principal balance of the Diana Shipping Loan from the definition of consolidated debt for purposes of calculating the Net Worth Covenant and the Net Gearing Ratio Covenant of the Loan;
- a change in the interest rate from 2.75% per annum plus USD LIBOR to 3.10% per annum over USD LIBOR from September 12, 2016 until December 31, 2018, thereafter reverting to 2.75% over USD LIBOR until maturity;
- an obligation of the Company to ensure that the vessels owned by its wholly-owned subsidiaries which are not borrowers under the Loan shall not be subject to any encumbrance, such obligation not affecting however the power of the Company to sell such vessels and dictate the use of the relevant proceeds; and
- a change in the borrower from one wholly-owned subsidiary of the Company to another wholly-owned subsidiary and the release of the c.v. YM Los Angeles as a collateral vessel and inclusion of the c.v. Puelo as a collateral vessel under the Loan.
The existing and the amended repayment schedules of the Loan are presented in Table 1 below:
Table 1. - In US$ Millions
In addition, and as a condition to The Royal Bank of Scotland plc Loan amendments, the Company has also amended its US$50 million Diana Shipping Loan to defer its repayment until the later of (i) the repayment or prepayment in full by the Company of the Deferred Tranche under The Royal Bank of Scotland plc Loan, and (ii) September 15, 2018. The amendment will also change the borrower under the Diana Shipping Loan to another wholly-owned subsidiary of Diana Containerships Inc., and provide for an increase of the interest rate for the period between September 12, 2016 and December 31, 2018 to 3.35% per annum over USD LIBOR.
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