Stolt in Landmark Deal

In what its investment bankers are calling a landmark deal, Stolt Tankers and Terminals Holdings S.A., says it has received commitments for a second private placement of $175 million in unsecured debt. This is the second time that Stolt has successfully placed private debt. In November 1989, it secured $100 million in unsecured long term private debt.

Mary Ann Ostrander, director of investor relations for Stolt, says that while other shipping companies have obtained funds on an unsecured basis, most of those loans have also included so-called “negative pledge clauses” which require companies not to pledge their assets for other borrowings. She says that makes them, in effect, secured borrowings.

Stolt says the debt will be placed through its wholly-owned subsidiary, Parcel Tankers Inc. It will use the $175 million to repay short-term debt and to fund capital programs including extending the lives of several ships and construction of eight new parcel tankers.

This is only an excerpt of Stolt in Landmark Deal

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