China Eximbank contributes to fourth tranche of $227.5 million syndicated loan to Star Bulk Carriers for construction of seven vessels (Linked to Project ID#66250, #62802, #63094, #63138, #63140, #63201, #63203)

On March 31, 2015, Star Bulk Carriers Corp., a shipping company organized under the laws of the Republic of Marshall Islands, entered into an agreement with DNB Bank ASA as facility agent, security agent account bank, and book runner, DNB Bank ASA and the Export-Import Bank of China (CEXIM) as mandated lead arrangers and DNB Bank ASA, Skandinaviska Enskilda Banken AB (SEB) and CEXIM as original lenders (the “DNB-SEB-CEXIM $227.5 million Facility”) for up to $227.5 million to partially finance the construction cost of seven new building vessels, Gargantua (ex-HN166), Goliath (ex-HN167), Maharaj (ex-HN184), Star Poseidon (ex-HN198), Star Aries (ex-HN1338), Star Taurus (ex-HN1339), and Star Eleni (HN1342). The financing is available in seven separate tranches, one for each new vessel. This Project ID#63139 records the fourth tranche of $23.4 million for financing the construction of Star Poseidon (ex-HN198). However, China Exim Bank's specific contribution to this tranche is unknown. Project ID#66250 records all seven tranches and total Chinese official financial commitments. As a result of the sale of the Star Aries and the Star Taurus, Star Bulk Carriers Corp. decided not to draw down on two tranches under this facility. The first tranche of $32.4 million and the second and third tranches of $30.3 million each were drawn upon the delivery of the vessels Gargantua on April 15, 2015, and Goliath and Maharaj on July 15, 2015. The fourth tranche of $23.4 million was drawn, upon the delivery of the vessel Star Poseidon on February 16, 2016. On June 29, 2015, Star Bulks signed a supplemental letter with the lenders under this facility to amend certain covenants governing this facility until December 31, 2016, that as a result of the sale of the Star Aries on February 29, 2016, and that of the Star Taurus on April 16, 2016, the lenders will not draw down on the fifth and the sixth tranches under this facility. In 2017 the recipient canceled the loan commitment for Star Eleni, the seventh tranche, that on January 3, 2018, the recipient took delivery of the Newcastlemax vessels Star Eleni (ex HN 1342) which was financed under bareboat leases with CSSC. The tranches are repayable in 24 quarterly consecutive installments ranging between $0.4 million and $0.5 million, with the first becoming due and payable three months from the draw-down date of each tranche and a final balloon installment for each tranche, ranging between $14.6 million and $20.2 million payable simultaneously with the 24th installment. The DNB–SEB–CEXIM $227.5 million Facility was secured by a first priority cross-collateralized mortgage over the financed vessels and general and specific assignments and is guaranteed by Star Bulk Carriers Corp. The delivery installments of $113,046 in aggregate for the respective vessels were partially financed by $93,000 drawn down under the DNB-SEB-CEXIM $227,500 Facility. On September 27, 2018, Star Bulks entered into a loan agreement with DNB Bank ASA for a loan of $310.0 million, a tranche of $240 million of which refinanced all amounts outstanding under multiple facilities including the DNB-SEB-CEXIM $227.5 million facility. The $240 million was drawn on September 28, 2018 and will be repayable in 20 equal quarterly installments of $8.7 million and a balloon payment along with the last installment in an amount of $66.1 million. The tranche of $70 million will be repayable in 12 quarterly installments, each being equal to 5.55% of that tranche and the remaining balance will be repaid in the form of a balloon installment at the final repayment date.

Additional details

1. Project ID#66250 records all seven tranches and total Chinese official financial commitments. 2. AidData has coded this transaction as a collateralized loan because DNB Bank ASA was selected as the security agent (i.e. collateral agent) for the loan. When lenders take collateral as security for their loans, a collateral/security agent is often appointed to enforce rights against the collateral in the event of the borrower’s default under the loan. 3. Star Bulk Carriers Corp. is a Marshall Islands-incorporated shipping company. It owns and operates a fleet of dry bulk carrier vessels. The Company's vessels transport major bulks, which include iron ore, coal and grain, and minor bulks, which include bauxite, fertilizers and steel products. 4. This project is linked to Project ID#62802 (first tranche), ID#63094 (second tranche), ID#63138 (third tranche), ID#63139 (fourth tranche), ID#63140 (fifth tranche), ID#63201 (sixth tranche), and ID#63203 (seventh tranche).

Number of official sources

7

Number of total sources

7