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DEBT
 12 Months Ended
Dec. 31, 2022
DEBT  
DEBT

7 - DEBT

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Long-term debt consists of the following:

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December 31, 

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December 31, 

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2022

    

2021

 

Principal amount

 

$

171,000

 

$

246,000

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Less: Unamortized deferred financing costs

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(6,079)

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(7,771)

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Less: Current portion

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—

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—

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Long-term debt, net

 

$

164,921

 

$

238,229

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As of December 31, 2022 and 2021, $6,079 and $7,771 of deferred financing costs, respectively, were presented as a direct deduction within the outstanding debt balance in the Company’s Consolidated Balance Sheets. Amortization expense for deferred financing costs for the years ended December 31, 2022, 2021 and 2020 was $1,694, $3,536 and $3,903, respectively. This amortization expense is recorded as a component of Interest expense in the Consolidated Statements of Operations.

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On August 31, 2021, the $495 Million Credit Facility and the $133 Million Credit Facility were refinanced with the $450 Million Credit Facility as noted below.

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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 accounted for as a debt modification, rather than an extinguishment of debt, is being amortized over the life of the $450 Million Credit Facility in accordance with ASC 470-50.

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$450 Million Credit Facility

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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.

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

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●The final maturity date is August 3, 2026.

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

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●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 an 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.

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●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.

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

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●Collateral includes thirty-nine of our current vessels, leaving five vessels unencumbered.

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

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●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.

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●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%.

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●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.

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On November 8, 2022, the Company entered into an agreement with the lenders under the $450 Million Credit Facility to extend the 360-day period that the net proceeds received from the sale of the Genco Provence may be held as restricted cash to finance a qualifying replacement vessel until October 28, 2023. Refer also to Note 4 — Vessel Acquisitions and Dispositions.

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As of December 31, 2022, there was $212,930 of availability under the $450 Million Credit Facility. Total debt repayments of $75,000 and $104,000 were made during the years ended December 31, 2022 and 2021, respectively, under the $450 Million Credit Facility. As of December 31, 2022, the total outstanding net debt balance was $164,921.

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As of December 31, 2022, the Company was in compliance with all of the financial covenants under the $450 Million Credit Facility.

 

The following table sets forth the scheduled repayment of the outstanding principal debt of $171,000 as of December 31, 2022 under the $450 Million Credit Facility:

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Year Ending December 31, 

    

Total

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2026

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$

171,000

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Total debt

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$

171,000

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$133 Million Credit Facility

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On August 14, 2018, the Company entered into a five-year senior secured credit facility (the “$108 Million Credit Facility”) with Crédit Agricole Corporate & Investment Bank (“CACIB”), as Structurer and Bookrunner, CACIB and Skandinaviska Enskilda Banken AB (Publ) as Mandate Lead Arrangers, CACIB as Administrative Agent and as Security Agent, and the other lenders party thereto from time to time.

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On June 11, 2020, the Company entered into an amendment and restatement agreement to the $108 Million Credit Facility which 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”). On June 15, 2020, the Company drew down $24,000 under the Revolver.

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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. As of December 31, 2022 and 2021, the total outstanding net debt balance under this facility was $0.

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In relation to the $108,000 tranche of the $133 Million Credit Facility, borrowings bore interest at LIBOR plus 2.50% through September 30, 2019 and LIBOR plus a range of 2.25% to 2.75% thereafter, dependent upon the Company’s ratio of total net indebtedness to the last twelve months EBITDA.

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In relation to the $25,000 Revolver tranche of the $133 Million Credit Facility, borrowings bore interest at LIBOR plus 3.00%.

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Total debt repayments of $114,940 and $9,160 were made during the years ended December 31, 2021 and 2020, respectively, under the $133 Million Credit Facility.

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$495 Million Credit Facility

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On May 31, 2018, the Company entered into a five-year senior secured credit facility for an aggregate amount of up to $460,000 with Nordea Bank AB (publ), New York Branch (“Nordea”), as Administrative Agent and Security Agency, the various lenders party thereto, and Nordea, Skandinaviska Enskilda Banken AB (publ), ABN AMRO Capital

USA LLC, DVB Bank SE, Crédit Agricole Corporate & Investment Bank, and Danish Ship Finance A/S as Bookrunners and Mandated Lead Arrangers. Deutsche Bank AG Filiale Deutschlandgeschäft, and CTBC Bank Co. Ltd. are Co-Arrangers under this facility.

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On February 28, 2019, the Company entered into an Amendment and Restatement Agreement (the “Amendment”) for this credit facility (the “$495 Million Credit Facility”) with Nordea Bank AB (publ), New York Branch  (“Nordea”), as Administrative Agent and Security Agent, the various lenders party thereto, and Nordea, Skandinaviska Enskilda Banken AB (publ), ABN AMRO Capital USA LLC, DVB Bank SE, Crédit Agricole Corporate & Investment Bank, and Danish Ship Finance A/S  as Bookrunners and Mandated Lead Arrangers.  The Amendment provided for an additional tranche 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.  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.

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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.

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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. As of December 31, 2022 and 2021, the total outstanding net debt balance under this facility was $0.

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In relation to the $460,000 tranche of the $495 Million Credit Facility, borrowings bore interest at LIBOR plus 3.25% through December 31, 2018 and LIBOR plus a range of 3.00% and 3.50% thereafter, dependent upon the Company’s ratio of total net indebtedness to the last twelve months EBITDA.

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In relation to the $35,000 tranche of the $495 Million Credit Facility, borrowings bore interest at LIBOR plus 2.50% through September 30, 2019 and LIBOR plus a range of 2.25% to 2.75% thereafter, dependent upon the Company’s ratio of total net indebtedness to the last twelve months’ EBITDA.

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Total debt repayments of $334,288 and $72,686 were made during the years ended December 31, 2021 and 2020, respectively, under the $495 Million Credit Facility.

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Interest rates

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

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For the Years Ended December 31,

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2022

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2021

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2020

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Effective Interest Rate

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4.63

%  

3.22

%  

3.71

%  

Range of Interest Rates (excluding unused commitment fees)

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2.26 % to 6.54

%  

2.24 % to 3.48

%  

2.65 % to 3.50

%  

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Letter of credit

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In conjunction with the Company entering into a long-term office space lease (See Note 14 — Leases), the Company was required to provide a letter of credit to the landlord in lieu of a security deposit. As of September 21, 2005, the Company obtained an annually renewable unsecured letter of credit with DnB NOR Bank at a fee of 1% per annum. During September 2015, the Company replaced the unsecured letter of credit with DnB NOR Bank with an unsecured letter of credit with Nordea Bank Finland Plc, New York and Cayman Island Branches (“Nordea”) in the same amount at a fee of 1.375% per annum. The letter of credit outstanding was $300 as of December 31, 2022 and 2021 at a fee of 1.375% per annum. The letter of credit is cancelable on each renewal date provided the landlord is given 30 days' minimum notice. As of December 31, 2022 and 2021, the letter of credit outstanding has been securitized by $315 that

was paid by the Company to Nordea during the year ended December 31, 2015. These amounts have been recorded as restricted cash included in total noncurrent assets in the Consolidated Balance Sheets as of December 31, 2022 and 2021.