Hafnia seals $715m credit line backed by 32 ships

Hafnia, a leading player in the product tanker sector, has successfully secured a substantial $715 million revolving credit facility, backed by its fleet of 32 modern vessels. This financing arrangement, supported by a consortium of 11 top international banks, is a strategic move to enhance the company’s liquidity and reduce its cost of capital.

Strategic Financing for Future Expansion

The seven-year credit facility features competitive margins and a flexible 20-year age-adjusted amortization structure. This innovative approach not only provides Hafnia with significant liquidity flexibility but also strengthens its balance sheet, positioning the company for ongoing expansion in the market. By refinancing existing debt with this new facility, Hafnia has effectively lowered its overall funding costs and reduced its cash flow breakeven point. This strategic manoeuvre enhances their liquidity profile while allowing for future growth opportunities.

Perry van Echtelt, Hafnia’s Chief Financial Officer, emphasised the advantages of the new financing arrangement. He noted that the lower costs and favourable terms of the revolving credit line grant the company the agility to manage its liquidity needs effectively. The facility also includes an uncommitted accordion feature of up to $417 million, which can be drawn down within the next two years, further bolstering Hafnia’s financial flexibility.

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The financing transaction was spearheaded by ING, OCBC, and Standard Chartered as mandated lead arrangers. Other notable participants included BNP Paribas, DBS, IYO Bank, Societe Generale, and UOB, who acted as lead arrangers, while E.Sun Commercial Bank, SEB, and Taishin International Bank joined as co-arrangers. ING also served as the facility coordinator and agent for this significant financing deal.

Broad Support from Banking Syndicate

The successful arrangement highlights Hafnia’s strong reputation within the banking community, as noted by Stephen Fewster, ING’s Global Head of Shipping. He commented on the diverse syndicate’s support, which underscores the robust following Hafnia has developed among financial institutions. This backing not only reflects confidence in Hafnia’s operational capabilities but also positions the company to navigate the competitive landscape of the maritime sector effectively.

As Hafnia continues to implement its growth strategy, this credit facility serves as a crucial tool in enhancing operational flexibility and ensuring the company is well-prepared for future challenges and opportunities in the industry.