Information about major customers:
As of September 30, 2011, ten of the Company’s 12 vessels are on charter, pursuant to either time charters or bareboat charters, of which nine vessels are on charter to wholly-owned subsidiaries of Overseas Shipholding Group, Inc .(“OSG”) and one vessel is on charter to a wholly-owned subsidiary of Frontline, Ltd. The charters’ payments under the charters are a major source of revenue for the Company. Two vessels are operating in the Tankers International pool.
Note 4 – Interest bearing debt
As of September 30, 2011, DHT had total outstanding interest bearing debt totalling $301,156,250 of which $180,000,000 is priced at Libor+0.70%, $62,000,000 is priced at Libor+0.85%, $26,281,250 is priced at Libor+2.75% and $32,875,000 is priced at Libor+2.50%. Interest is payable quarterly in arrears. As of September 30, 2011, the Company had one interest rate swap in an amount of $65,000,000 under which DHT pays a fixed rate of 5.95% including margin of 0.85%. From January 1, 2009 the Company has discontinued hedge accounting on a prospective basis. Derivatives are re-measured to their fair value at each balance sheet date. The resulting gain and loss is recognized in profit or loss.
The Company’s credit agreements contain a financial covenant related to the charter-free market value of the Company’s vessels that secure the obligations under the credit facilities. With regards to the credit agreement with the Royal Bank of Scotland totaling $242,000,000 the charter free value (broker valuations) of the vessels that secure the obligations under this credit facility shall at all times be above 120% of the outstanding under the loan plus the actual or notional cost of terminating the interest rates swap. In order to stay in compliance with this covenant, the Company made a voluntary prepayment of $24,000,000 in the third quarter. With regards to the credit agreement related to the DHT Phoenix totaling $26,281,250 and DHT Eagle totaling $32,875,000 entered into in the first half of 2011, the charter free value of the vessel shall at all times be above 130% of the outstanding under the respective loans. These two credit facilities also contain financial covenants related to each of the borrowers as well as DHT on a consolidated basis.