Maritrans Announces New Financing Agreements
Maritrans Inc. announced that the company recently entered into new financing agreements to replace $36.8 million of its existing term debt. This move allows Maritrans to extend its overall debt amortization profile while taking advantage of current low long-term interest rates.
The new debt facility consists of two pieces: $7.3 million with a 5-year amortization and $29.5 million with a 9.5-year amortization and a 50 percent balloon payment at the end of the term. The new debt accrues interest at an average fixed rate of 5.53 percent, replacing existing term debt that matured through 2007 with an average current floating rate of 3.22 percent. The new debt is collateralized by two barges and three tugs.
The purpose of the new credit facility is to allow the company to better match debt terms and asset lives. Maritrans continues to maintain a $40 million revolving credit facility to fund working capital and capital expenditures during its continuing rebuilding program to convert single-hulled vessels to OPA compliant double-hulled vessels. The revolving credit agreement expires in January 2007.