International Seaways Successfully Completes $250 Million Senior Unsecured Bond Placement in Nordic Market
International Seaways, Inc., one of the largest tanker companies engaged in the transportation of crude oil and petroleum products worldwide, announced today the successful placement of $250 million in senior unsecured bonds. This significant financial development underscores the company’s ability to access diverse global capital markets and further strengthens its balance sheet as it continues to execute on long-term strategic initiatives.
The bonds, which carry a five-year tenor and mature in September 2030, will pay investors a fixed annual coupon of 7.125%, with interest distributed semi-annually in arrears. Following this issuance, International Seaways plans to seek a listing for the bonds on the Oslo Stock Exchange, a recognized hub for maritime and shipping-related debt instruments.
Strategic Purpose of the Bond Issue
The net proceeds from this offering are expected to be directed primarily toward the refinancing of the company’s Ocean Yield sale-and-leaseback agreement, a key financial arrangement that previously supported the acquisition and operation of certain vessels within the International Seaways fleet. By retiring or restructuring this obligation, the company anticipates greater flexibility in managing its capital structure while potentially lowering long-term financing costs.
Additionally, a portion of the proceeds will be allocated to general corporate purposes, which may include further strengthening working capital, pursuing selective growth opportunities, or enhancing liquidity reserves in response to evolving market conditions.
Strengthening Market Confidence
The bond placement highlights the confidence investors in the Nordic bond market place in International Seaways. The Nordic region has developed into a major center for shipping finance, attracting both institutional investors and specialized funds with expertise in maritime and energy transportation.
By securing a sizeable transaction at a competitive coupon, International Seaways demonstrates that it has not only gained traction with global investors but also reaffirmed its reputation as a creditworthy and reliable issuer. The 7.125% coupon reflects prevailing market conditions, balancing investor demand with the company’s cost of capital considerations.
Role of Financial Institutions
The transaction was executed with the support of several high-profile financial institutions acting as arrangers and managers.
- Joint Bookrunners:
- DNB Carnegie
- Nordea Bank Abp, filial i Norge
- Arctic Securities AS
- Skandinaviska Enskilda Banken AB (publ), Oslo branch (“SEB”)
- Passive Joint Lead Managers:
- Crédit Agricole Corporate and Investment Bank
- Clarksons Securities AS
- Fearnleys Securities AS
This diverse group of banks and securities firms reflects a deep bench of expertise in shipping finance, Nordic capital markets, and international investment banking. Their involvement not only facilitated the smooth placement of the bonds but also provided access to a broad base of potential investors, ensuring the success of the issuance.
Legal and Regulatory Framework
Consistent with international securities regulations, International Seaways emphasized that the bonds are not registered under the U.S. Securities Act of 1933, as amended, nor under any state securities laws. As such, they cannot be offered or sold within the United States unless an exemption from registration requirements applies.
The bonds are being offered exclusively to qualified institutional buyers (QIBs) within the United States under Rule 144A, as well as to certain investors outside the United States pursuant to Regulation S. This structure is standard practice for international debt offerings, ensuring compliance with cross-border financial regulations while providing a pathway for diverse institutional participation.
Importantly, International Seaways clarified that this press release should not be construed as an offer to sell or a solicitation to purchase securities. It merely provides disclosure regarding the successful completion of the transaction, in line with regulatory and investor relations requirements.
Broader Context: International Seaways’ Market Position
International Seaways, headquartered in New York, operates one of the largest fleets of oceangoing tankers in the world. The company plays a vital role in transporting crude oil and petroleum products across global trade routes, linking major production centers with refining hubs and demand markets.
In recent years, the company has navigated a volatile shipping landscape marked by:
- Shifting demand patterns in global energy markets.
- Geopolitical events impacting crude oil supply chains.
- Environmental regulations that require fleet modernization and efficiency upgrades.
- Fluctuating charter rates across crude and product tanker segments.
Against this backdrop, maintaining a flexible and well-structured capital framework has been essential. The successful placement of $250 million in unsecured bonds adds to the company’s financing toolkit, supporting both debt management and potential future investment opportunities.
Significance of Nordic Bond Market for Shipping Companies
The decision to issue in the Nordic bond market is particularly noteworthy. Over the past decade, this market has become a preferred financing avenue for shipping companies worldwide. Investors in Norway and the broader Nordic region have developed specialized expertise in maritime assets, giving them confidence in industries that can appear opaque to traditional debt investors.
Listing the bonds on the Oslo Stock Exchange will further enhance their visibility, liquidity, and tradability, potentially broadening the pool of investors able to participate in the secondary market. This move underscores International Seaways’ intent to maintain transparency and align with best practices in international debt issuance.
Forward-Looking Implications
With the bond placement successfully completed, International Seaways is well-positioned to pursue its strategic objectives. Key benefits expected from this transaction include:
- Enhanced Liquidity: The infusion of $250 million strengthens the company’s cash position and flexibility.
- Debt Refinancing: Replacement of the Ocean Yield sale-and-leaseback agreement is likely to simplify the capital structure and reduce reliance on complex financing arrangements.
- Capital Market Access: By establishing a presence in the Nordic bond market, International Seaways builds relationships that may support future issuances or refinancing efforts.
- Investor Confidence: Strong demand for the bonds signals institutional support for the company’s long-term outlook.
While the coupon rate of 7.125% reflects relatively high costs in today’s interest rate environment, management appears to view this as a worthwhile trade-off for securing longer-term funding certainty.
Investor Considerations
For investors, these bonds offer exposure to the maritime transport sector, which can provide attractive returns but also carries unique risks. These risks include:
- Freight rate volatility driven by global oil demand and fleet supply.
- Environmental regulations that could require costly vessel retrofits or replacements.
- Geopolitical tensions in key shipping lanes.
- Interest rate risk given the fixed coupon nature of the bonds.
However, International Seaways’ scale, operational expertise, and global footprint provide a degree of resilience. The company’s ability to successfully access capital markets suggests investor confidence in its capacity to manage these risks.
The $250 million senior unsecured bond placement marks a milestone for International Seaways as it reinforces its financial foundation and expands its global capital markets presence. By tapping into the Nordic investor base and securing long-term financing, the company has demonstrated its strategic foresight in balancing capital efficiency with operational flexibility.
As International Seaways looks ahead, this transaction is expected to support both its refinancing goals and broader corporate strategy, ensuring that it remains well-positioned to navigate the challenges and opportunities of the global tanker market.