Horizon wins bank loan amendment
Horizon Lines said its banks agreed to relax their financial covenants under the carrier’s revolving credit facility, preserving the carrier’s access to liquidity while its refinancing effort continues, the Journal of Commerce reported.
The carrier has been working to refinance its debt since February, when it agreed to plead guilty to an antitrust charge for price-fixing in the Puerto Rico trade. The carrier’s $45 million fine, later cut to $15 million, threatened to put Horizon in default of its debt agreements.
Horizon announced June 1 that a majority of current bondholders had agreed to exchange $330 million in existing convertible senior notes for combination of new debt and equity.
The deal was contingent on Horizon obtaining commitments for a separate issuance of $350 million in newly issued secured senior notes.
The new debt package would replace Horizon’s existing $225 million senior secured revolving credit facility, a $125 million secured term loan and the $330 million of convertible notes.
Horizon said the banks’ agreement to amend the existing credit facility “relaxes compliance under the credit facility's financial covenants for the second quarter, and will thereby preserve access to liquidity under the revolver and facilitate the company's ability to move forward with its previously announced refinancing effort.”
"This amendment will provide additional financial covenant flexibility as we work with our banks and our convertible note holders towards a comprehensive refinancing, which we announced earlier this month," said Michael T. Avara, executive vice president and chief financial officer.
Horizon is the largest domestic ocean carrier operating between the U.S. mainland and Puerto Rico, Alaska, Hawaii and Guam, and last December launched an eastbound trans-Pacific service from China to the U.S. West Coast.
The carrier has been working to refinance its debt since February, when it agreed to plead guilty to an antitrust charge for price-fixing in the Puerto Rico trade. The carrier’s $45 million fine, later cut to $15 million, threatened to put Horizon in default of its debt agreements.
Horizon announced June 1 that a majority of current bondholders had agreed to exchange $330 million in existing convertible senior notes for combination of new debt and equity.
The deal was contingent on Horizon obtaining commitments for a separate issuance of $350 million in newly issued secured senior notes.
The new debt package would replace Horizon’s existing $225 million senior secured revolving credit facility, a $125 million secured term loan and the $330 million of convertible notes.
Horizon said the banks’ agreement to amend the existing credit facility “relaxes compliance under the credit facility's financial covenants for the second quarter, and will thereby preserve access to liquidity under the revolver and facilitate the company's ability to move forward with its previously announced refinancing effort.”
"This amendment will provide additional financial covenant flexibility as we work with our banks and our convertible note holders towards a comprehensive refinancing, which we announced earlier this month," said Michael T. Avara, executive vice president and chief financial officer.
Horizon is the largest domestic ocean carrier operating between the U.S. mainland and Puerto Rico, Alaska, Hawaii and Guam, and last December launched an eastbound trans-Pacific service from China to the U.S. West Coast.
