XML 28 R12.htm IDEA: XBRL DOCUMENT
v3.19.1

Bank Debt | 12 Months Ended
--- | ---
Dec. 31, 2018
Debt Disclosure [Abstract] |
Bank Debt | Bank Debt Bank debt is comprised of the following secured borrowings:
|  |  |  |  |  | December 31,
Borrower |  | Commencement |  | Maturity |  | 2017 |  | 2018
Maxdekatria |  | February 2016 |  | July 2018 |  | $ | 9,167 |  |  | $ | — |
Glovertwo |  | February 2016 |  | July 2018 |  | 12,833 |  |  | — |
Shikokutessera |  | February 2016 |  | July 2018 |  | 14,667 |  |  | — |
Youngone |  | September 2015 |  | August 2018 |  | 22,733 |  |  | — |
Petra |  | June 2015 |  | December 2018 |  | 18,024 |  |  | — |
Pemer |  | June 2015 |  | December 2018 |  | 18,024 |  |  | — |
Maxtessera |  | July 2014 |  | November 2018 |  | 28,000 |  |  | — |
Shikokuokto |  | June 2015 |  | December 2018 |  | 15,018 |  |  | — |
Safe Bulkers |  | November 2018 |  | October 2021 |  | — |  |  | 30,000 |
Maxtessera |  | November 2018 |  | October 2022 |  | — |  |  | 26,000 |
Maxdeka |  | August 2011 |  | December 2022 |  | 17,044 |  |  | 13,635 |
Shikokupente |  | August 2018 |  | August 2023 |  | — |  |  | 14,930 |
Shikoku |  | October 2011 |  | August 2023 |  | 22,400 |  |  | 18,667 |
Shikokuennia |  | October 2018 |  | October 2023 |  | — |  |  | 17,730 |
Petra |  | November 2018 |  | November 2023 |  | — |  |  | 9,075 |
Pemer |  | November 2018 |  | November 2023 |  | — |  |  | 9,075 |
Maxeikosiepta |  | December 2018 |  | December 2023 |  | — |  |  | 5,000 |
Shikokuepta |  | February 2016 |  | February 2024 |  | 22,050 |  |  | 20,417 |
Maxdekatria |  | July 2018 |  | February 2024 |  | — |  |  | 11,750 |
Glovertwo |  | July 2018 |  | February 2024 |  | — |  |  | 13,420 |
Shikokutessera |  | July 2018 |  | February 2024 |  | — |  |  | 14,430 |
Pentakomo |  | July 2018 |  | February 2024 |  | — |  |  | 11,750 |
Maxeikositria |  | September 2017 |  | August 2024 |  | 12,968 |  |  | 11,930 |
Maxeikosi |  | September 2017 |  | August 2024 |  | 12,968 |  |  | 11,930 |
Maxpente |  | September 2017 |  | August 2024 |  | 20,000 |  |  | 17,400 |
Maxeikositessera |  | September 2017 |  | August 2024 |  | 13,650 |  |  | 12,090 |
Maxenteka |  | September 2017 |  | August 2024 |  | 15,925 |  |  | 14,332 |
Maxeikosiexi |  | September 2015 |  | September 2024 |  | 6,063 |  |  | 5,248 |
Marathassa |  | September 2015 |  | September 2024 |  | 6,545 |  |  | 5,690 |
Marinouki |  | September 2015 |  | September 2024 |  | 9,904 |  |  | 8,590 |
Kerasies |  | September 2015 |  | September 2024 |  | 6,918 |  |  | 6,014 |
Soffive |  | September 2015 |  | September 2024 |  | 10,757 |  |  | 9,305 |
Eptaprohi |  | September 2015 |  | September 2024 |  | 50,518 |  |  | 43,818 |
Safe Bulkers |  | November 2014 |  | September 2024 |  | 160,527 |  |  | 118,925 |
Pelea - Vasstwo |  | December 2018 |  | December 2024 |  | — |  |  | 20,075 |
Maxeikosiena |  | September 2015 |  | September 2025 |  | 21,271 |  |  | 20,314 |
Gloversix - Shikokuokto |  | December 2018 |  | December 2025 |  | — |  |  | 35,000 |
Youngtwo |  | January 2017 |  | January 2027 |  | 23,817 |  |  | 23,039 |
Total |  |  |  |  |  | 571,791 |  |  | 579,579 |
Current portion of Long-term debt |  |  |  |  |  | 26,583 |  |  | 37,431 |
Long-term debt |  |  |  |  |  | 545,208 |  |  | 542,148 |
Total debt |  |  |  |  |  | 571,791 |  |  | 579,579 |
Current portion of deferred financing costs |  |  |  |  |  | 995 |  |  | 1,246 |
Deferred financing costs non-current |  |  |  |  |  | 3,392 |  |  | 3,640 |
Total deferred financing costs |  |  |  |  |  | 4,387 |  |  | 4,886 |
Total debt |  |  |  |  |  | 571,791 |  |  | 579,579 |
Less: Total deferred financing costs |  |  |  |  |  | 4,387 |  |  | 4,886 |
Total debt, net of deferred financing costs |  |  |  |  |  | 567,404 |  |  | 574,693 |
Less: Current portion of long-term debt, net of current portion of deferred financing costs |  |  |  |  |  | 25,588 |  |  | 36,185 |
Long-term debt, net of deferred financing costs, non-current |  |  |  |  |  | 541,816 |  |  | 538,508 |
Each of Maxeikosiena,Youngone and Youngtwo had entered into a sale and leaseback agreement with third party companies, subsidiaries of a financial institution, regarding the respective vessel owned by the relevant subsidiary. Under these agreements, each vessel was sold and leased back for a period of 10 years, on a net daily bareboat charter rate of $6.50, with a purchase obligation at the end of the 10 t h year. Furthermore, each Subsidiary holds an option to purchase back the respective vessel after the second year of the bareboat charter, at annual intervals and predetermined purchase prices. In view of the obligation of the Subsidiaries to purchase the respective vessels at the end of the bareboat charter, the Company has assessed that this transaction be recorded as a financing transaction. During the year ended December 31, 2018, the Company exercised the option to purchase back the vessel owned by Youngone. The above loans and credit facilities bear interest at LIBOR plus a margin, except for each of Maxeikosiena and Youngtwo and for a portion of each of the Maxdeka and Shikoku loan facilities. Maxdeka and Shikoku have entered into loan facilities with government owned export credit institutions, each bearing interest at the Commercial Interest Reference Rate (“CIRR”) published by the Organization for Economic Co-operation and Development, as applicable on the date of the signing of the relevant loan agreements. Each of the Maxeikosiena and Youngtwo loan facilities are deemed to incur interest at a fixed rate calculated so that the initial facility amount be amortised to maturity down to the purchase obligation price of each vessel. The above loans and credit facilities are generally repayable by quarterly principal installments and a balloon payment due on maturity, with the exception of the Maxdeka and Shikoku loan facilities which are repaid by semi-annual principal instalments without a balloon payment due on maturity and the Maxeikosiena and Youngtwo loan facilities, that are repayable by principal installments every 45 days out of a portion of the bareboat hire payment and a balloon payment due on maturity equal to the purchase obligation. The fair value of debt outstanding on December 31, 2018 amounted to $577,517 when valuing the respective portions of the Maxdeka and Shikoku loan facilities on the basis of the CIRR as of December 2018 and of the Maxeikosiena, Youngone and Youngtwo loan facilities on the basis of the deemed equivalent fixed rate, as applicable on December 31, 2018, which are considered to be Level 2 items in accordance with the fair value hierarchy. As of December 31, 2018, there was no amount available for drawdown under the above loan agreements. The estimated minimum annual principal payments required to be made after December 31, 2018, based on the loan and credit facility agreements as amended, are as follows:
To December 31, |
2019 | $ | 37,431 |
2020 | 62,864 |
2021 | 81,516 |
2022 | 83,118 |
2023 | 72,280 |
2024 and thereafter | 242,370 |
Total | $ | 579,579 |
Total interest incurred on long-term debt for the years ended December 31, 2016, 2017 and 2018 amounted to $20,397, $23,266 and $25,713, respectively, which includes interest capitalized of $821, $42 and $0 for the years ended December 31, 2016, 2017 and 2018, respectively. The average interest rate (including the margin) for all bank loan and credit facilities during the years 2016, 2017 and 2018 was 3.290% p.a., 3.838% p.a. and 4.428% p.a., respectively. As of December 31, 2018, the foregoing loan and credit facilities were secured as follows :
• | First priority mortgages over the vessels owned by the respective borrowers;
• | For one of the Safe Bulkers credit facilities, first priority mortgages over the vessels Andreas K, Pedhoulas Cherry, Pedhoulas Commander, Martine, Eleni, Kypros Bravery, Kypros Loyalty and Troodos Air;
• | For the other Safe Bulkers credit facility, first priority mortgage over the vessel Maria and second priority mortgages over the vessels Kanaris, Efrossini, Venus Horizon, Pedhoulas Builder and Pedhoulas Fighter;
• | First priority assignment of all insurances and earnings of the mortgaged vessels; and
• | Corporate guarantee from Safe Bulkers in respect of facilities entered into by the Subsidiaries.
Loan and credit facility agreements contain debt covenants including restrictions as to changes in management and ownership of the vessels, entering into certain long-term charters, additional indebtedness and mortgaging of vessels without the respective lender’s prior consent, minimum vessel insurance cover ratio requirements, as well as minimum fair vessel value ratio to outstanding loan principal requirements (the “Minimum Value Covenant”). The Minimum Value Covenant must not fall below 120%. The borrowers are permitted to pay dividends to their owners as long as no event of default under the respective loan has occurred or has not been remedied or would occur as a result of the payment of such dividends. Certain of the loan and credit facility agreements require the respective borrowers to maintain at all times a minimum balance in each vessel operating account, from $150 to $1,000. The corporate guarantees of the Company include the following financial covenants:
• | its total consolidated liabilities divided by its total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets), must not exceed 85% for credit facilities outstanding with commercial financing institutions and 80% for credit facilities outstanding with government owned export credit institutions (the “Consolidated Leverage Covenant”);
• | its total consolidated assets (based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets) less its total consolidated liabilities must not be less than $150,000 for credit facilities outstanding with government owned export credit institutions and for credit facilities outstanding with commercial financing institutions (the “Net Worth Covenant”);
• | the ratio of its EBITDA over consolidated interest expense must not be less than 2.0:1, on a trailing 12 months’ basis, for credit facilities, outstanding with commercial financing institutions (the “EBITDA Covenant”);
• | the ratio of its aggregate debt to EBITDA must not exceed 5.5:1 on a trailing 12 months’ basis, applicable as of June 30, 2020 (our next testing date) onwards for credit facilities outstanding with government owned export credit institutions;
• | its consolidated debt must not exceed $580,000 on December 31, 2018, June 30, 2019 and December 31, 2019 for credit facilities outstanding with government owned export credit institutions;
• | payment of dividends is subject to no event of default having occurred and be continuing or would occur as a result of the payment of such dividends; and
• | a minimum of 30% or 35%, as the case may be, of its voting and ownership rights shall remain directly or indirectly beneficially owned by the Hajioannou family for the duration of the relevant credit facilities and in the case of one facility Polys Hajioannou beneficially holds a minimum of 20% of the voting and ownership rights.
The Minimum Value Covenant, Consolidated Leverage Covenant, EBITDA Covenant and Net Worth Covenant do not apply to the Shikokuepta loan facility, and the Minimum Value Covenant and EBITDA Covenant do not apply to the Maxeikosiena and Youngtwo financing agreements. As of December 31, 2018, the Company was in compliance with all debt covenants in effect, with respect to its loans and credit facilities.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration