Page 32: of Marine News Magazine (October 2017)

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MARINE FINANCE

Marine Finance for BROWN WATER OPERATORS

A primer for navigating the ‘ups and downs’ of marine money for domestic stakeholders.

By Barry Parker essel ? nanciers are resourceful and adaptable to For example, Kirby Corporation, a public company, re- changing markets. On the domestic side, ? nanciers veals in a 2017 regulatory ? ling: “The Company has a

V of Jones Act and “brown water” assets have con- $550,000,000 unsecured revolving credit facility (“Revolving tinued to serve their customers through shifting shoals in Credit Facility”) with a syndicate of banks, with JPMorgan both broader capital markets and in the marine markets Chase Bank, N.A. as the administrative agent bank, with a – both known for their ups and downs. Marine ? nance maturity date of April 30, 2020 ... As of March 31, 2017, the can take many forms. In the broadest sense, funding can Company … had $177,535,000 of debt outstanding under be done through loans, where the vessel is owned by the the Revolving Credit Facility.” Kirby has also been able to tap borrower, or through leases, where an institution owns the debt capital markets, and its ? ling notes that: “The Company equipment and charters out it out to the customer (some- has $500,000,000 of unsecured senior notes (“Senior Notes times for the life of the equipment). Series A” and “Senior Notes Series B”) with a group of institu- tional investors, consisting of $150,000,000 of 2.72% Senior

Notes Series A due February 27, 2020 and $350,000,000

M M & OARINE ONEY ITS RIGINS

Companies with larger balance sheets, approaching $1 of 3.29% Senior Notes Series B due February 27, 2023. No principal payments are required until maturity.” billion of asset values, and more, are able to tap into mon-

Another well publicized loan deal in recent years, this ey center bank credit markets through syndicated loans one with equipment providing security, was Moran Towing (which might be term loans or revolving credit), from syn- dicates of major banks, or, more recently from institutional & Transportation’s senior secured revolving credit facility, which closed in mid 2014. Investment bank Merrill Lynch investors (these are called “Term Loan B”).

Image: Credit AdobeStock / Merek

October 2017

MN 32