July 10, 2018

Scorpio Bulkers refinances vessel

Scorpio Bulkers in July entered into a financing transaction on an Ultramax drybulk vessel with an unaffiliated third party.

Scorpio will sell 2015 Japanese-built Ultramax drybulk vessel SBI Echo for $19.0 million and lease the vessel back through a five-year bareboat charter agreement at a rate of $5,400 per day.

If converted to floating interest rates, based on the expected weighted average life of the transaction, the equivalent cost of financing at current swap rates would be Libor plus 1.97% per annum.

The transaction also provides Scorpio with options to repurchase the vessel beginning on the third anniversary of the sale until the end of the bareboat charter agreement.

The transaction is being treated as a finance lease, and this transaction will increase the company’s liquidity by approximately $7.9 million after repayment of the vessel’s existing loan.