Item
1.01.
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Entry
into a Material Definitive Agreement.
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On
August 24th,
2007
International Shipholding Corporation (the “Company”) entered into a
Memorandum of Agreement (MOA) for the purchase of one 6400 CEU Panamanian
flagged pure car and truck carrier to be reflagged under the United
States
flag (the “Vessel”). Under the MOA, the purchase was subject to
significant conditions and was, in the opinion of the Company’s
management, the equivalent of a letter of intent. On September 10,
2007, the Company entered into a Loan Agreement by and among (1)
Waterman
Steamship Corporation (WSC), a wholly-owned subsidiary of the Company,
as
borrower, (2) the Company, as guarantor, and (3) DnB NOR Bank ASA,
as
facility agent and security trustee. Under this Loan Agreement,
the Lenders agreed to provide WSC with a term loan of up to Five
Billion
Yen (¥5,000,000,000), or approximately $43 million at current exchange
rates. The Company purchased and took possession of the Vessel on
September 13, 2007.
The loan is secured by the Vessel, its charter hire and insurances,
and is
guaranteed by the Company. The loan originally entered into
under a floating Libor to Yen interest rate but has been swapped to a
Yen fixed rate facility plus an applicable margin of 0.85%.
The Loan Agreement contains affirmative and negative covenants that,
among
other things, require the Company to maintain a specified tangible
net
worth, leverage ratio, interest coverage ratio and working
capital. The Loan Agreement also contains customary events of
default. Upon the occurrence of an event of default that
remains uncured after any applicable cure period, WSC may be required
to
make immediate repayment of all indebtedness to the Lenders and the
Lenders would be entitled to pursue other remedies against WSC, the
Vessel
and the Company under its guaranty.
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Item
2.03.
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Creation
of a Direct Financial Obligation or an Obligation Under an Off-Balance
Sheet Arrangement of a Registrant.
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The
information set forth in Item
1.01 above is incorporated herein by
reference.
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