Please turn to slide six for a summary of our amended loan terms. The $1.1 billion of debt outstanding under our previous facility has been amended into a term loan. In addition, we have secured a liquidity facility in the amount of $20 million. This amount is currently undrawn and available.
Maturity has been extended to December 2015 and subject to certain conditions, the company maintains the option to extend maturity by a further 18 months to June 2017. The amended loan contains a quarterly cash sweep on amounts above $20 million with no fixed amortization until maturity.
Cash interest margin over LIBOR is 350 basis points and the loan will also bear a non-cash PIK interest component of 250 basis points. The credit agreement allows for margin to be reduced with lower leverage.
In addition, the company issued warrants to lending group equal to 19.9% of shares outstanding. One-third of the warrants are exercisable immediately, one-third when the stock price reaches $10 and the last third exercisable when the stock reaches $12. All expenses relating to the transaction will be amortized over the life of loan.To summarize, we are very pleased to have reached a favorable outcome with our lenders. We believe our amended loan gives us the required flexibility; low cash interest margin and no fixed amortization to help us better manage the current challenging freight market and position the company and its shareholders to benefit from the shipping cycle recovery. I would like to thank our lending group for their cooperation in reaching this new agreement and for their ongoing support of the company. I would also like to take this opportunity to personally thank Alan Ginsberg, our outgoing CFO for his efforts on getting this and many other deals done and seeing it through until completion. I also thank Alan for his dedication and devotion to the company over the last 7.5 years and wish him the best of luck in his new endeavors. Read the rest of this transcript for free on seekingalpha.com
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