Safe Bulkers inks its 1st sustainability-linked loan

Monaco-based bulker owner Safe Bulkers has unveiled its first sustainability-linked credit facility that incorporates an incentive discount on interest rate, linked to independently verified pre-determined emission targets.

As informed, the company has entered into the new credit facility of $60 million with a five-year tenor secured with five vessels.

The facility is comprised of a term loan tranche of $30 million and a revolving credit facility tranche providing for a drawdown capacity of up to $30 million reducing from its fourth year onwards.

The proceeds from the credit facility will refinance loan facilities with the same financial institution of an outstanding term loan tranche of $71.1 million and a revolving credit facility tranche with a drawdown capacity of $6.5 million, presently secured by six vessels and maturing in 2024, five of which will secure the new credit facility and one of which will remain debt free.

Safe Bulkers explained it does not intend to utilize the full capacity of the reducing revolving credit facility tranche at this time. The agreement contains financial covenants in line with the existing loan and credit facilities of the company.

“This is a further action towards deleveraging, while at the same time the company strengthens its balance sheet and maintains its financial flexibility through the existing cash reserves and the agreed undrawn revolving credit facilities,” Loukas Barmparis, President of Safe Bulkers, said.

“We expect that by the end of the year if the charter market continues to perform, we will reach a leverage ratio that we consider optimum.”

Last week, Safe Bulkers published its sustainability report for 2020 where it outlined its actions toward sustainable development and the shipping industry’s decarbonization targets.

“Our company, through selective actions managed to promote its social footprint, develop its personnel, assist local societies, undertook environmental investments to early adopt the IMO ballast water convention, or to invest in exhaust gas cleaning devices for sulphur oxide emissions and continues to take actions for the reduction of greenhouse gas emissions footprint through new investments in the most energy efficient newbulids or improvements on existing fleet,” Polys V. Hajioannou, CEO of Safe Bulkers, said in the report.