Bloomberg News

General Maritime Bonds Fall to Record Low After Loan Change

July 14, 2011

(Updates with lead arrangers in fifth paragraph.)

July 14 (Bloomberg) -- The bonds of General Maritime Corp., the second-largest U.S. oil-tanker owner, fell to the lowest on record after the company changed the terms of its loans to avoid breaking the conditions of its credit agreements.

Its $300 million of 12 percent bonds due November 2017 dropped 8 cents to 70 cents on the dollar at 1:41 a.m. in New York, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority. The debt, originally sold in November 2009, has dropped from 106.8 cents in September.

Under the terms of the amendment announced yesterday, the company will be required to maintain a minimum balance in cash and cash equivalents and availability on its revolving credit line of $35 million through Dec. 31, which was reduced from $50 million. General Maritime must also have a minimum cash balance of $40 million through March 31.

Jeffrey Pribor, the company’s chief financial officer, didn’t return a call for comment.

Nordea Bank Finland Plc and DnB NOR Bank ASA are the lead arrangers on the $550 million revolver and $372 million senior secured credit facility, General Maritime said in a statement yesterday. Oaktree Capital Management LP acted as lender and administrative agent on the $200 million credit facility, the company said.

Overseas Shipholding Group is the largest U.S.-based oil- tanker owner.

--With assistance from Michael Amato in New York. Editors: Richard Bedard, Faris Khan

To contact the reporter on this story: Matthew Leising in New York at mleising@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.


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