kl09006.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): September 4,
2008
GENCO
SHIPPING & TRADING LIMITED
(Exact
Name of Registrant as Specified in Charter)
Republic
of the Marshall Islands
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000-28506
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98-043-9758
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(State
or Other Jurisdiction
of
incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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299
Park Avenue
20th
Floor
(Address
of Principal Executive Offices)
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10171
(Zip
Code)
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Registrant’s
telephone number, including area code: (646) 443-8550
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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On
September 4, 2008, Genco Shipping & Trading Limited (the “Company”) executed
a Credit Agreement and other definitive documentation for its new $320 million
credit facility. The Company had previously announced the bank
commitment for this facility in a press release on August 18,
2008. The new credit facility is underwritten by Nordea Bank Finland
Plc, New York Branch, who serves as Administrative Agent, Bookrunner, and
Collateral Agent; Bayerische Hypo- und Vereinsbank AG, who serves as Bookrunner;
DnB NOR Bank ASA; Sumitomo Mitsui Banking Corporation, acting through its
Brussels Branch; and Deutsche Schiffsbank Akteingesellschaft. DnB NOR
Bank ASA underwrote the Company’s existing $1.4 billion credit facility and
serves under that facility as Administrative Agent and Collateral
Agent.
Under
this new credit facility, subject to the conditions set forth in the Credit
Agreement, the Company may borrow an amount up to $320
million. Amounts borrowed and repaid under the new credit facility
may not be reborrowed. The new credit facility has a maturity date of
the earlier of the fifth anniversary of the initial borrowing date under the
facility or December 31, 2013.
Loans
made under the new credit facility may be used to fund or refund to the Company
the acquisition costs of six drybulk newbuildings, consisting of three Capesize
and three Handysize vessels, which the Company agreed on June 16, 2008 to
acquire from Lambert Navigation Ltd., Northville Navigation Ltd., Providence
Navigation Ltd., and Prime Bulk Navigation Ltd.
Company
subsidiaries that will own the six vessels to be purchased under the new credit
facility will act as guarantors under the new credit facility.
All
amounts owing under the new credit facility will be secured by the
following:
· cross-collateralized
first priority mortgages of each of the Company’s vessels financed with the new
credit facility;
· an
assignment of any and all earnings of the mortgaged vessels;
· an
assignment of all insurances of the mortgaged vessels;
· an
assignment of time charters for the mortgaged vessels that exceed two years;
and
· a first
priority pledge of the Company’s ownership interests in each subsidiary
guarantor.
The
Company will pledge the collateral described above for a given vessel at the
time an amount is to be borrowed for such vessel under the
facility.
The
Company’s borrowings under the new credit facility will bear interest at the
London Interbank Offered Rate (“LIBOR”) for an interest period elected by the
Company of one, three, or six months, or longer or shorter if available and
agreed by all lenders, plus the Applicable Margin, which initially is 1.25% per
annum. If the Company’s ratio of Average Net Debt to EBITDA (each as
defined in the Credit Agreement) is 3.0 or less after December 31, 2009, the
Applicable Margin decreases to 1.20%. Interest is payable at the end
of each interest period, unless a period longer than three months is elected, in
which case interest is payable quarterly in arrears. Interest is
calculated based on actual days over 360 days. In addition to other
fees payable by the Company in connection with the new credit facility, the
Company will pay a commitment fee at a rate of 0.40% per annum of the daily
average unutilized commitment of each lender under the facility which begins
accruing on September 4, 2008.
The new
credit facility will be subject to ten consecutive semi-annual scheduled
repayments of principal, with the first repayment occurring on June 30,
2009. The first six such repayments are for $16,000,000 each, and the
last four repayments are for $10,700,000 each. A final repayment of
$181,200,000 is to be made on the maturity date. The Company must
also make mandatory prepayments following upon the sale, lease, transfer, or
loss of a mortgaged vessel. The lenders’ total commitment under the
facility will be reduced by the amount allocated for a vessel to be financed
under the facility if the purchase agreement for such vessel is sold or
transferred or there is a material default of the seller under such
agreement. The Company may prepay the new credit facility, without
penalty, with two days notice for LIBOR rate advances, in minimum amounts of $5
million together with accrued interest on the amount prepaid.
The
Credit Agreement contains covenants substantially similar to those in the
Company’s $1.4 billion credit facility, including the following financial
covenants which will apply to the Company and its subsidiaries on a consolidated
basis and will be measured at the end of each fiscal quarter:
·
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The
leverage covenant requires the ratio of average net debt to EBITDA to be a
maximum of 5.5:1.0.
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·
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The
aggregate amount of cash and cash equivalents and all undrawn working
capital credit facilities with maturities of more than 12 months must not
be less than $500,000 per vessel owned by the Company or any of its
subsidiaries.
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·
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The
ratio of EBITDA to interest expense, on a rolling last four-quarter basis,
must be no less than 2.0:1.0.
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·
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Consolidated
net worth must be no less than $263,300,000 plus 80% of the value of any
new equity issuances of the Company from June 30,
2007.
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·
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The
aggregate fair market value of the mortgaged vessels must at all times be
at least 130% of the aggregate outstanding principal amount under the new
credit facility plus all letters of credit outstanding; the Company has a
30 day remedy period to post additional collateral or reduce the amount of
the loans outstanding.
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The
Company can continue to pay cash dividends in accordance with its dividend
policy and certain terms of the Credit Agreement so long as no event of default
has occurred and is continuing and that no event of default will occur as a
result of the payment of such dividend.
The new
credit facility includes usual and customary events of default and remedies for
facilities of this nature.
The
foregoing description of the new credit facility and the Credit Agreement
contained herein does not purport to be complete and is qualified in its
entirety by reference to the Credit Agreement, a copy of which is filed herewith
as Exhibit 10.1 and incorporated herein by reference.
Item
2.03. Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The
information set forth above under Item 1.01 is incorporated into this Item 2.03
by reference.
Item
9.01. Financial Statements and Exhibits.
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10.1
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Credit
Agreement, dated as of September 4, 2008, among Genco Shipping &
Trading Limited, various Lenders, Nordea Bank Finland Plc, New York
Branch, as Administrative Agent, Collateral Agent, and
Bookrunner, Bayerische Hypo- und Vereinsbank AG, as Bookrunner, DnB NOR
Bank ASA, Sumitomo Mitsui Banking Corporation, Brussels Branch, and
Deutsche Schiffsbank
Akteingesellschaft.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, Genco Shipping &
Trading Limited has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENCO SHIPPING & TRADING LIMITED
DATE: September 8, 2008
/s/ John C.
Wobensmith
John C.
Wobensmith
Chief Financial
Officer, Secretary and Treasurer
(Principal Financial
and Accounting Officer)
EXHIBIT
INDEX
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10.1
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Credit
Agreement, dated as of September 4, 2008, among Genco Shipping &
Trading Limited, various Lenders, Nordea Bank Finland Plc, New York
Branch, as Administrative Agent, Collateral Agent, and
Bookrunner, Bayerische Hypo- und Vereinsbank AG, as Bookrunner, DnB NOR
Bank ASA, Sumitomo Mitsui Banking Corporation, Brussels Branch, and
Deutsche Schiffsbank
Akteingesellschaft.
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