Hapag-Lloyd Buys Back US Bonds
German container line Hapag-Lloyd Hapag-Lloyd settles a high-yield dollar bond partly prematurely. The carrier would seek to pay off $125m in principal on its US dollar-denominated bond two years early.
"In the context of a continuous effort in optimising its capital structure and reducing interest costs, Hapag-Lloyd is announcing the call (repayment) of US$ 125 million in principal amount of its US dollar denominated bond due 2017 for partial redemption approximately two years prior to the maturity date on 15 October 2017," says a statement from the company.
The bond, with an aggregate principal amount of US$ 250 million, was issued in October 2010 with an annual coupon of 9.75%, reflecting high interest rate levels as a consequence of the financial crisis at that time.
The partial redemption is conditional upon the successful completion of a refinancing of the Company's Fleet Financing 2011 with a new vessel financing facility in an amount of at least $115,000,000 provided by existing relationship banks of Hapag-Lloyd.
"With the early partial redemption of our US dollar bond, we are reducing Hapag-Lloyd's cost of capital with tangible savings to our shareholders", said Nicolás Burr, Chief Financial Officer of Hapag-Lloyd. "Along with the recent announced restructuring of existing vessel financings the early partial redemption further improves our financial position and we make a step forward in our plan to reduce our interest costs and add more financial flexibility."
The call notice for the partial redemption was sent to the trustee and bondholders today. The early redemption will take place on 30 December 2015 if the condition to the redemption is fulfilled.
The redemption price is 102.4375% of the principal amount of the redeemed bonds, plus accrued and unpaid interest. Hapag-Lloyd may decide to further redeem the US dollar bond in full or partially prior to maturity in 2017.
