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Update: Euronav Uses Its NYSE IPO Proceeds Wisely

Euronav (OTC:EONVF) and now (EURN) has announced it will repay its mezzanine bond within the next two weeks. This bond was issued early last year to finance the acquisition of 15 VLCC tankers from Maersk, which suddenly put the company in a very strong position on the international oil tanker market. In my original article, I called that financing nepotism, as the terms were extremely favorable for the lender.

The bonds were originally issued at just 85% of par value with an interest rate of 5.95% in the first year and 8.5% from the second year on (resulting in a total yield to maturity of in excess of 10%). I was quite unhappy with this financing and am glad to see Euronav decided to use the proceeds from its listing on the NYSE (which resulted in a $229M cash inflow) to repay this ridiculously expensive debt. A redemption notice… Read More …