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CMA Shipping 2011

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Precious Money

Shipowners continue to face difficulties in securing financing, but for the fortunate few there exist some pockets of liquidity, albeit at smaller amounts. Thailand’s Precious Shipping has successfully negotiated for an extension of its credit facility from Krung Thai Bank and two other local banks for the baht equivalent of USD 250 million. This follows closely its earlier announcement that it had renewed its secured revolving loan facility agreement with DnB NOR Bank, Singapore branch and two undisclosed lenders. The two facilities will provide Precious Shipping with up to USD 350 million for the acquisition of second hand vessels.

In the latest transaction, Krung Thai Bank, Bank of Ayudhya and Siam City Bank have extended its facility till 18th January 2010 but not without some amendments. The facility amount was lowered from USD 300 million to Thai Baht equivalent of USD 250 million (Baht 8,750 million) and the currency of the facility was changed from US dollar to Thai Baht. This seems to suggest the local banks are still facing difficulties in financing long positions in US dollars. Precious Shipping will therefore have to assume the risk of an appreciating US dollar against Thai Baht at the time of the drawdown. The facility is priced at the minimum lending rate minus 1% with a commitment fee of 1% per annum on undrawn loan amount.

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