Nordic American Tankers (NYSE

NAT) - The 4th Quarter 2018 report - In an important transaction, NAT has a new financial structure. Markets are positive. - Seite 2

Our fleet consists of 23 well maintained Suezmax tankers (all our ships above 15 years of age has a CAP 1 class notation, which above all is related to steel quality) with an aggregate cargo capacity of 23 million barrels of crude oil, illustrating the size of NAT.

The average age of our fleet is about 10,8 years; 10 units were built from 2010 onwards, 13 units were built between 2000 and 2009.

The outcome of the inspections of our ships by oil companies ("vetting") reflects the good quality of our fleet. 

NAT has one of the largest fleet of Suezmax tankers in the world. In a capital intensive industry like ours, timing and financing are the key issues to achieve a sound cost structure.

Financing

Our existing revolving credit facility ("RCF") syndicated by three banks was nearing its final year before maturity and would be classified as short term within this year. NAT has been refinanced at the time of this report.

During the last 18 months, we have reduced our debt under the RCF with about $150 million and we are pleased to have taken out the remaining portion of the RCF through a new $306 million financing announced and concluded on 12 February 2019.

The $306 million senior secured credit agreement is a five-year loan arranged by CSG Investments, Inc., and funded by Beal Bank of Dallas, Texas. This new loan has retired the old RCF in full.

The new credit will see the effective interest be reduced compared to what was paid under the old RCF at the end of 2018. It is also lower than what was indicated to us for the Secured Bond we contemplated in 2018 and the Back-Stop facility that was cancelled in 3Q18. The new loan will amortize as per a 20-year profile with full maturity after 5 years with annual downpayments amounting to 5% of the original loan amount.

The financing will contribute to a competitive cash break-even rate for NAT.  More importantly, the new loan allows NAT greater financial flexibility.

With this new US based debt facility, together with the three 2018 newbuildings financed by a leasing arrangement with Ocean Yield, all long term financing is now in place for NAT.

The debt level of NAT has always been among the lowest in the industry. The NAT board has focus on further reducing the debt to a level that NAT maintained a few years ago.

Our net debt at year end stood at $15.5 million per vessel.  

Dividend

For 4Q2018 a cash dividend of $0.04 per share has been declared.  NAT has a policy to maximize dividend payments within its financial flexibility. Payment of the dividend is expected to be on or about March 15, 2019, to shareholders of record on March 1, 2019.