Scorpio Tankers redeems $200m notes, secures $90m credit facility
Scorpio Tankers Inc. is redeeming $200 million in 7.5% Senior Unsecured Notes due 2030 on July 17, 2026, at a make-whole price of 106.4 to par. The firm also secured a $90 million credit facility from Standard Chartered Bank and DekaBank Deutsche Girozentrale to finance four new MR product tankers, with the facility expected to close in Q3 2026.
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Scorpio Tankers Inc. has announced plans to redeem its outstanding 7.5% Senior Unsecured Notes due 2030 and simultaneously secured a new credit facility to fund fleet expansion. The company will redeem the notes, which have an aggregate principal amount of $200 million, on July 17, 2026. The redemption will occur at a make-whole price of 106.4 to par plus accrued but unpaid interest. The notes were originally scheduled to mature in January 2030.
To support its acquisition strategy, Scorpio Tankers Inc. received a commitment for a credit facility of up to $90 million from Standard Chartered Bank and DekaBank Deutsche Girozentrale. This capital will finance a portion of the purchase price for four scrubber-fitted MR newbuilding product tankers. These vessels are currently under construction at Jingjiang Nanyang Shipbuilding Co., Ltd. in China, with expected deliveries in 2026 and 2027.
The new Credit Facility carries an interest rate of SOFR plus a margin of 1.20% per annum. It features a final maturity of seven years from the delivery date of each vessel. The company stated that the financial covenants and terms are similar to those in its existing credit facilities. The transaction is subject to customary conditions precedent and the execution of definitive documentation, with an expected closing in the third quarter of 2026.
Financial Overview of Transactions
| Transaction Component | Details |
|---|---|
| Redemption Amount | $200 million |
| Redemption Date | July 17, 2026 |
| Redemption Price | 106.4 to par plus accrued interest |
| Credit Facility Amount | $90 million |
| Interest Rate | SOFR + 1.20% per annum |
| Facility Maturity | 7 years from vessel delivery |
Scorpio Tankers Inc. currently owns a fleet of 79 product tankers, comprising 29 LR2 tankers, 36 MR tankers, and 14 Handymax tankers, with an average age of 10.2 years. The company has also agreed to sell one MR product tanker and four LR2 product tankers, expected to close in the third quarter of 2026. Additionally, it has agreements or letters of intent for six MR newbuildings, four LR2 newbuildings, and two VLCC newbuildings with deliveries extending through 2030.
How will the early redemption of the 7.5% notes impact Scorpio Tankers' interest expense and overall debt profile?
What is the expected return on investment for the new scrubber-fitted MR tankers given the current freight rate environment?
Will the company pursue further debt refinancing or equity issuance to fund the remaining balance of its extensive newbuilding program?
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