Norway-based shipping company Höegh Autoliners has secured new and long-term financing for four of the LNG-powered Aurora newbuilds, all its existing bank debt, and the purchase of two car carriers.
The company has also secured additional liquidity reserves. The new fleet facility has a six-year tenor, comes with reduced interest rates and is covenant-light.
The total facility size is $720 million, out of which $350 million is already drawn and the other $90 million will be drawn in connection with the purchase of H. Jacksonville and Höegh Jeddah, with delivery in April and September 2024 respectively.
The remaining $280 million will be drawn in connection with the delivery of the Aurora newbuilds number 1,2,5 and 6, the company informed.
As explained, secured vessels under the facility are the six Horizon class vessels only, leaving all other owned vessels (24) in the fleet debt-free. The facility is structured as partly term loan and partly RCF, giving the company flexibility when it comes to amortization.
In addition to the $720 million fleet facility, Höegh Autoliners has secured a $200 million non-amortizing, four-year credit facility. This facility is currently undrawn and will serve as an additional liquidity reserve and provide flexibility for future capital allocation. The lenders in both facilities are Citibank, BNP Paribas, ING Bank, CA-CIB, DNB, Danske Bank, SEB and Nordea.
The other eight newbuilds are all financed long-term by Bank of Communications at attractive terms.
“Höegh Autoliners is now fully financed at attractive terms into 2030. Cash capacity cost and break-even cash rates are historically low giving solid cash returns in today’s market and increased resilience through the cycle. All mortgage debt is secured with the most modern and fuel-efficient part of our fleet and newbuilds,” Per Øivind Rosmo, CFO of Höegh Autoliners, commented.
“With 24 owned vessels being debt free, attractive and flexible amortizations, only USD 30 million left in equity instalments for the 12 newbuilds, and the additional liquidly reserve of USD 200 million, the Company is in a unique position to continue to create shareholder’s value.”
Last month, Höegh Autoliners was granted almost $14 million in Enova funding to use ammonia for two of the Aurora Class vessels.
To remind, the company has a total of twelve Aurora Class units on order. All of them are designed with engines that run on LNG and low-sulfur oil, and with an ammonia-ready certification from DNV. To use ammonia as fuel, the installation of an ammonia engine and an additional tank to maintain sufficient range are required.
These vessels are expected to significantly contribute to the company’s goal of achieving net zero emissions by 2040.