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Note 8 - Debt
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Debt Disclosure [Text Block]

(8)

DEBT

 

The following is a summary of all debt outstanding:

 

(In Thousands)

        
  

September 30, 2025

  

December 31, 2024

 

Senior bonds:

        

9.125% Senior Notes due July 2030 (A)

 $650,000  $— 

Vessel Facility Agreements

  21,897   10,387 

Senior Secured Term Loan (B)

  —   212,500 

10.375% Senior Unsecured Notes due July 2028 (C)

  —   250,000 

8.50% Senior Secured Notes due November 2026 (D)

  —   175,000 
  $671,897  $647,887 

Debt discount and issuance costs

  (16,255)  (10,791)

Less: Current portion of long-term debt

  (5,840)  (65,386)

Total long-term debt

 $649,802  $571,710 

 

 (A)As of September 30, 2025, the fair value (Level 1) of the 9.125% Senior Notes due July 2030 was $697.1 million. The fair value is obtained from public transaction activity.

 

(B)

As of  December 31, 2024, the fair value (Level 3) of the Senior Secured Term Loan was $218.2 million. The Level 3 fair value is derived from discounted present value calculations.

 

(C)

As of  December 31, 2024, the fair value (Level 1) of the 10.375% Senior Unsecured Notes due July 2028 was $266.1 million. The fair value is obtained from public transaction activity on the Nordic ABM exchange (XOAM). 

 (D)As of  December 31, 2024, the fair value (Level 1) of the 8.50% Senior Secured Notes due November 2026 was $180.8 million. The fair value is obtained from public transaction activity on the XOAM.

 

On July 7, 2025, all amounts outstanding, including accrued interest, under the Senior Secured Term Loan, the 10.375% Senior Unsecured Notes due July 2028 and the 8.50% Senior Secured Notes due November 2026 (Extinguished Debt) were redeemed and paid in full in conjunction with the issuance of the 2030 Notes described below. All collateral, security and guarantees related to the Extinguished Debt were released in conjunction with the repayment. In addition, the holders of the Senior Unsecured Notes and the 2026 Notes received redemption premiums totaling $15.0 million and $4.5 million, respectively. We also wrote off approximately $7.5 million in discount and debt issue costs related to the Extinguished Debt, resulting in a $27.1 million loss on early extinguishment of debt which is recorded in our Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2025.

 

9.125% Senior Notes due July 2030

 

On July 7, 2025, we, certain of our subsidiaries (Guarantors), and Wilmington Trust, National Association, as trustee (Trustee), entered into an indenture (Indenture), pursuant to which we issued $650.0 million in aggregate principal amount of 9.125% Senior Notes due 2030 (2030 Notes). The 2030 Notes are unconditionally guaranteed on a senior unsecured basis by the Guarantors.

 

The 2030 Notes mature on July 15, 2030. Interest on the 2030 Notes is payable semi-annually in arrears on each January 15 and July 15, commencing January 15, 2026, to holders of record on the January 1 and July 1 immediately preceding the related interest payment date, at a rate of 9.125% per annum.

 

At any time prior to July 15, 2027, we may redeem the 2030 Notes, at a redemption price equal to 100% of the principal amount of the 2030 Notes redeemed, plus an applicable make-whole premium and accrued and unpaid interest, if any. At any time on or after July 15, 2027, we may redeem the 2030 Notes, at the redemption price of 104.563%, which declines to 100% on or after July 15, 2029, plus accrued and unpaid interest.

 

The Indenture contains covenants that, among other things and subject to certain exceptions, limit our ability, and the ability of our restricted subsidiaries to: (i) incur, assume or guarantee additional indebtedness or issue certain preferred stock; (ii) create liens to secure indebtedness; (iii) pay distributions on equity interests, repurchase equity securities, make investments or redeem subordinated indebtedness; (iv) restrict distributions, loans or other asset transfers; (v) consolidate with or merge with or into, or sell substantially all of our assets to, another person; (vi) sell or otherwise dispose of assets, including equity interests in subsidiaries; (vii) designate a subsidiary as an Unrestricted Subsidiary (as defined in the Indenture); and (viii) enter into transactions with affiliates.

 


Revolving Credit Facility

 

On July 7, 2025, we and the Guarantors entered into a credit agreement with DNB Bank ASA, New York Branch, as facility agent and security trustee, and a syndicate of lenders providing for a $250.0 million senior secured revolving credit facility (Revolving Credit Facility). The Revolving Credit Facility matures on April 15, 2030, and replaced our previous $25.0 million credit facility. Amounts borrowed under the Revolving Credit Facility are subject to an interest rate per annum equal to (i) for Term Secured Overnight Financing Rate (Term SOFR) advances, the aggregate of (a) the Term SOFR for the relevant interest period, plus (b) an applicable margin ranging from 250 to 350 basis points, depending on our total net leverage ratio (Margin); or (ii) for Alternate Base Rate (ABR) advances, the aggregate of (a) the ABR Rate, which equals the highest of (1) the Prime Rate in effect on such day, (2) the Federal Funds Rate in effect on such day plus 0.50%, (3) Term SOFR plus 1.00%, and (4) 1.00%. The Revolving Credit Facility also requires payment of quarterly customary unused commitment fees and if utilized, certain letter of credit and fronting fees.

 

The Revolving Credit Facility contains customary affirmative and negative covenants, representations and warranties, and events of default, along with the following three financial covenants: (i) a minimum liquidity test that the sum of consolidated cash and available commitments under the Revolving Credit Facility shall not be less than the greater of $20.0 million or 10% of net interest-bearing debt as defined in the agreement; (ii)  the ratio of net interest bearing debt to consolidated earnings before depreciation and amortization, interest and other debt costs, net and income tax expense shall be equal to or less than 3 to 1; and (iii) the aggregate fair market value of the collateral vessels divided by the total outstanding debt shall be at least 2.5 to 1. We are currently in compliance with these financial covenants.

 

Vessel Facility Agreements

 

We signed agreements for the construction of ten new vessels, all of which have been delivered as of September 30, 2025. We entered into Facility Agreements to finance a portion of the construction and delivery costs for approximately EUR 24.9 million ($26.7 million). Each of the ten Facility Agreements bear interest at fixed rates ranging from 2.7% to 6.3% and are payable in ten equal principal semi-annual installments, with the first installments commencing six months following delivery of the respective vessels. The Facility Agreements are secured by the vessels, guaranteed by Tidewater as parent guarantor and contain no financial covenants.

 

Extinguished Debt

 

Senior Secured Term Loan

 

On June 30, 2023, Tidewater entered into a Credit Agreement, by and among Tidewater, as parent guarantor, TDW International Vessels (Unrestricted), LLC, a Delaware limited liability company and a wholly-owned subsidiary of Tidewater (TDW International), as borrower, certain other unrestricted subsidiaries of Tidewater, as other security parties, the lenders party thereto, DNB Bank ASA, New York Branch (DNB Bank), as facility agent and DNB Markets, Inc. (DNB Markets), as bookrunner and mandated lead arranger (Senior Secured Term Loan), which was fully drawn on  July 5, 2023, in a single advance of $325.0 million.

 

The Senior Secured Term Loan was composed of a Tranche A loan and a Tranche B loan, each maturing on July 5, 2026. The Tranche A loan bore interest at Term SOFR plus 5% initially, increasing to 8% over the term. The Tranche B loan bore interest at Term SOFR plus 3.75%. The security for the Senior Secured Term Loan included mortgages over the vessels we acquired from Solstad Offshore ASA (Solstad) on July 5, 2023, along with associated assignments of insurances and assignments of earnings in respect of such vessels, a pledge of 100% of the equity interests in TDW International, a pledge of 66% of the equity interests in TDW International Unrestricted, Inc., an indirect wholly owned subsidiary of the company, and negative pledges over certain vessels indirectly owned by TDW International Unrestricted, Inc. The obligations of the borrower were guaranteed by Tidewater, subject to a cap equal to 50% of the aggregate purchase price for the Solstad vessels.

 

10.375% Senior Unsecured Notes due July 2028

 

On July 3, 2023, Tidewater completed an offering of $250.0 million aggregate principal amount of senior unsecured bonds in the Nordic bond market (Senior Unsecured Notes). The bonds were privately placed outside the U.S. pursuant to Regulation S under the Securities Act of 1933, as amended.

 

The Senior Unsecured Notes would have matured on July 3, 2028 and accrued interest at a rate of 10.375% per annum payable semi-annually in arrears on January 3 and July 3 of each year, beginning January 3, 2024. Prepayment of the Senior Unsecured Notes prior to July 3, 2025 was subject to a prepayment premium starting at 6.0% that declined over time.

 


8.5% Senior Secured Notes due November 2026

 

The 8.5% Senior Secured Notes due November 2026 (2026 Notes) totaling $175.0 million in aggregate principal amount, were issued pursuant to the Note Terms, dated as of November 15, 2021 (Note Terms), among us and Nordic Trustee AS, as Trustee and Security Agent. Repayment of the 2026 Notes was guaranteed by certain wholly owned U.S. subsidiaries named as guarantors therein (2026 Guarantors).

 

The 2026 Notes were secured by: (i) mortgages over the vessels owned by the 2026 Guarantors, the equipment part of such vessels, and related rights to insurance on all of the foregoing; (ii) our intercompany claims of the 2026 Guarantors against a Restricted Group Company (defined as Tidewater, Tidewater Marine International, Inc. (TMII) and the 2026 Guarantors); (iii) bank accounts that contain vessel collateral proceeds or the periodic deposits to the debt service reserve account; (iv) collateral assignments of the rights of the 2026 Guarantors under certain long term charter contracts now existing or hereafter arising; and (v) all of the equity interests of the 2026 Guarantors and 66% of the equity interests of TMII.

 

The 2026 Notes would have matured on November 16, 2026 and accrued interest at a rate of 8.5% per annum payable semi-annually in arrears in May and November of each year. Prepayment of the 2026 Notes after May 16, 2025 was subject to a 2.55% prepayment premium that stepped down by 0.85% at each six-month interval thereafter.