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Monday, May 04, 2009

Frontline Deposited Cash to Regain Loan Covenant Compliance

Monday, 04 May 2009

Frontline Ltd., the world's largest supertanker operator, was asked by lenders to deposit cash to comply with the terms of a loan amid a decline in ship prices. The company paid $3.8 million into a restricted bank account in March to "regain compliance" with a $180 million credit line, Hamilton, Bermuda-based Frontline said in a filing to the Securities and Exchange Commission.
Rental income from leasing a supertanker has slumped 91 percent since July as a global recession curbed demand for oil. The price of second-hand supertankers plunged 46 percent from a record $162 million last year, according to data from the London-based Baltic Exchange.
Source: Alaric Nightingale, Bloomberg