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DEBT

9 Months Ended

Sep. 30, 2021

7 – DEBT

Long-term debt, net consists of the following:


	September 30,		December 31,
	2021		2020
Principal amount	$	305,000	$	449,228
Less: Unamortized debt financing costs		(8,229)		(9,653)
Less: Current portion		—		(80,642)

Long-term debt, net	$	296,771	$	358,933


	September 30, 2021				December 31, 2020
			Unamortized				Unamortized
			Debt Issuance				Debt Issuance
	Principal		Cost		Principal		Cost
$450 Million Credit Facility	$	305,000	$	8,229	$	—	$	—
$495 Million Credit Facility		—		—		334,288		8,222
$133 Million Credit Facility		—		—		114,940		1,431

Total debt	$	305,000	$	8,229	$	449,228	$	9,653

As of September 30, 2021 and December 31, 2020, $8,229 and $9,653 of deferred financing costs, respectively, were presented as a direct deduction within the outstanding debt balance in the Company’s Condensed Consolidated Balance Sheets.

Effective August 31, 2021, the portion of the unamortized deferred financing costs for the $495 Million Credit Facility and the $133 Million Credit Facility that was identified as a debt modification, rather than an extinguishment of debt, is being amortized over the life of the $495 Million Credit Facility in accordance with ASC 470-50.

$450 Million Credit Facility

On August 3, 2021, the Company entered into the $450 Million Credit Facility, a five-year senior secured credit facility which is allocated between an up to $150,000 term loan facility and an up to $300,000 revolving credit facility which was used to refinance the Company’s $495 Million Credit Facility and its $133 Million Credit Facility. On August 31, 2021, proceeds of $350,000 under the $450 Million Credit Facility were used, together with cash on hand, to refinance all of the Company’s existing credit facilities (the $495 Million Credit Facility and the $133 Million Credit Facility, as described below) into one facility. $150,000 was drawn down under the term loan facility and $200,000 was drawn down under the revolving credit facility.

The key terms associated with the $450 Million Credit Facility are as follows:

●

The final maturity date is August 3, 2026.

●

Borrowings are subject to a limit of the ratio of the principal amount of debt outstanding to the collateral (“LTV”) of 55%.

●

There is a non-committed accordion term loan facility whereby additional borrowings of up to $150,000 may be incurred if additional eligible collateral is provided; such additional borrowings are subject to a LTV ratio of 60% for collateral vessels less than five years old or 55% for collateral vessels at least five years old but not older than seven years.

●

Borrowings bear interest at LIBOR plus a margin of 2.15% to 2.75% based on the Company’s quarterly total net leverage ratio (the ratio of total indebtedness to consolidated EBITDA), which may be increased or decreased by a margin of up to 0.05% based on the Company’s performance regarding emissions targets. Upon cessation of the LIBOR rate, borrowings will bear interest at a rate based on the Secured Overnight Financing Rate (“SOFR”) published by the Federal Reserve Bank of New York plus a spread adjustment, plus the applicable margin referred to above.

●

Scheduled quarterly commitment reduction are $11,720 per quarter followed by a balloon payment of $215,600.

●

Collateral includes forty of our current vessels, leaving five vessels expected to be delivered unencumbered after completion of all currently anticipated vessels purchases and sales.

●

Commitment fees are 40% of the applicable margin for unutilized commitments.

●

The Company can sell or dispose of collateral vessels without loan prepayment if a replacement vessel or vessels meeting certain requirements are included as collateral within 360 days.

●

The Company is subject to customary financial covenants, including a collateral maintenance covenant requiring the aggregate appraised value of collateral vessels to be at least 140% of the principal amount of loans outstanding, a minimum liquidity covenant requiring our unrestricted cash and cash equivalents to be the greater of $500 per vessel or 5% of total indebtedness, a minimum working capital covenant requiring consolidated current assets (excluding restricted cash) minus current liabilities (excluding the current portion of debt) to be not less than zero, and a debt to capitalization covenant requiring the ratio of total net indebtedness to total capitalization to be not more than 70%.

●

The Company may declare and pay dividends and other distributions so long as, at the time of declaration, (1) no event of default has occurred and is continuing or would occur as a result of the declaration and (2) the Company is in pro forma compliance with its financial covenants after giving effect to the dividend. Other restrictions in the dividend covenants of the Company’s prior credit facilities were eliminated.

As of September 30, 2021, there was $137,530 of availability under the $450 Million Credit Facility. Total debt repayments of $45,000 were made during the three and nine months ended September 30, 2021 under the $450 Million Credit Facility.

As of September 30, 2021, the Company was in compliance with all of the financial covenants under the $450 Million Credit Facility.

$495 Million Credit Facility

On May 31, 2018, the Company entered into the $460 Million Credit Facility, a five-year senior secured credit facility for an aggregate amount of up to $460,000 which was used to (i) refinance all of the Company’s prior credit facilities into one facility and (ii) pay down the debt on seven of the Company’s oldest vessels, which have been sold.

On February 28, 2019, the Company entered into an amendment to the $460 Million Credit Facility, which provided an additional tranche of up to $35,000 to finance a portion of the acquisitions, installations, and related costs for scrubbers for 17 of the Company’s Capesize vessels (as so amended, the “$495 Million Credit Facility”).

On June 5, 2020, the Company entered into an amendment to the $495 Million Credit Facility to extend the period that collateral vessels can be sold or disposed of without prepayment of the loan if a replacement vessel or vessels meeting certain requirements are included as collateral from 180 days to 360 days. On February 18, 2021 and February 26, 2021, the Company utilized $3,471 and $5,339 of the proceeds from the sale of the Genco Charger and Genco

Thunder, respectively, as loan prepayment under these terms. These amounts were classified as restricted cash in the Condensed Consolidated Balance Sheet as of December 31, 2020 and are included in the total debt repayments below.

As a result of the loan prepayments for vessel sales, scheduled amortization payments were recalculated in accordance with the terms of the facility during April 2021. Scheduled amortization payments under the $460 million tranche were revised to $12,400 which commenced on June 30, 2021, with a final payment of $189,605 due on the maturity date.

On December 17, 2020, the Company entered into an amendment to the $495 Million Credit Facility that allowed the Company to enter into a vessel transaction in which the Company agreed to acquire three Ultramax vessels in exchange for six of the Company’s Handysize vessels. Refer to Note 4 — Vessel Acquisitions and Dispositions.

On August 28, 2019, September 23, 2019 and March 12, 2020, the Company made total drawdowns of $9,300, $12,200 and $11,250, respectively, under the $35 million tranche of the $495 Million Credit Facility. Scheduled quarterly repayments under this tranche were $2,339. On June 7, 2021, the Company repaid the remaining outstanding balance under the $35 million tranche of $20,013.

Total debt repayments of $276,405 and $16,660 were made during the three months ended September 30, 2021 and 2020 under the $495 Million Credit Facility, respectively. Total debt repayments of $334,288 and $49,981 were made during the nine months ended September 30, 2021 and 2020 under the $495 Million Credit Facility, respectively.

On August 31, 2021, the $495 Million Credit Facility was refinanced with the $450 Million Credit Facility; refer to the “$450 Million Credit Facility” section above.

$133 Million Credit Facility

On August 14, 2018, the Company entered into the $108 Million Credit Facility, a five-year senior secured credit facility that was used to finance a portion of the purchase price of six vessels, which also serve as collateral under the facility, which were delivered to the Company during the three months ended September 30, 2018.

On June 11, 2020, the Company entered into an amendment and restatement agreement to the $108 Million Credit Facility that provided for a revolving credit facility of up to $25,000 (the “Revolver”) for general corporate and working capital purposes (as so amended, the “$133 Million Credit Facility”). The key terms associated with the Revolver were as follows:

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The final maturity date of the Revolver is August 14, 2023.

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Borrowings under the Revolver may be incurred pursuant to multiple drawings on or prior to July 1, 2023 in minimum amounts of $1,000.

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Borrowings under the Revolver will bear interest at LIBOR plus 3.00%

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The Revolver is subject to consecutive quarterly commitment reductions commencing on the last day of the fiscal quarter ending September 30, 2020 in an amount equal to approximately $1.9 million each quarter.

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Borrowings under the Revolver are subject to a limit of 60% for the ratio of outstanding total term and revolver loans to the aggregate appraised value of collateral vessels under the $133 Million Credit Facility.

The collateral and financial covenants otherwise remained substantially the same as they were under the $108 Million Credit Facility.

On June 15, 2020, the Company drew down $24,000 under the Revolver of the $133 Million Credit Facility. On March 31, 2021, the Company repaid the remaining $21,160 outstanding balance under the Revolver from this drawdown.

Total debt repayments of $90,620 and $2,380 were made during the three months ended September 30, 2021 and 2020 under the $133 Million Credit Facility, respectively. Total debt repayments of $114,940 and $5,660 were made during the nine months ended September 30, 2021 and 2020 under the $133 Million Credit Facility, respectively.

On August 31, 2021, the $133 Million Credit Facility was refinanced with the $450 Million Credit Facility; refer to the “$450 Million Credit Facility” section above.

Interest rates

The following table sets forth the effective interest rate associated with the interest expense for the Company’s debt facilities noted above, including the cost associated with unused commitment fees, if applicable. The following table also includes the range of interest rates on the debt, excluding the impact of unused commitment fees, if applicable:


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Effective Interest Rate	3.47	%	3.23	%	3.28	%	3.89	%
Range of Interest Rates (excluding unused commitment fees)	2.54 % to 3.38	%	2.65 % to 3.56	%	2.54 % to 3.38	%	2.65 % to 5.05	%