March 31, 2005
K-Sea signs $80 million revolving credit agreement
Staten Island based tug and barge specialist K-Sea Transportation Partners L.P. (NYSE: KSP) says that its operating subsidiary has signed a new, five-year $80 million revolving credit agreement with a syndicate of banks led by KeyBank National Association. The initial drawdown on the new revolving credit agreement, totaling $61.7 million, was used to repay outstanding borrowings on the previous facility and certain other higher cost variable rate term loans. In addition to a lower interest rate, the new credit agreement includes more favorable collateral and financial covenant requirements. As with the previous agreement, obligations under the new agreement are secured by a first priority security interest, subject to permitted liens, on certain of the operating subsidiary's vessels.
The new agreement also allows the company to request an increase in the total availability under the agreement by up to $20 million, to a maximum of $100 million. Loan proceeds can be used for any purpose in the ordinary course of business, including vessel acquisitions, ongoing working capital needs and distributions. The new agreement expands the company's financial flexibility and improves its ability to respond to opportunities in its markets.