KNOT Offshore Partners LP Announces Refinancing of Long Term Debt

  KNOT Offshore Partners LP Announces Refinancing of Long Term Debt

Business Wire

ABERDEEN, Scotland -- June 10, 2014

KNOT Offshore Partners LP ("KNOT" or the "Partnership") (NYSE: KNOP) announced
today that certain subsidiaries of the Partnership (the “borrowers”) have
entered into new senior secured credit facilities in order to refinance the
Partnership’s total long term bank debt. The senior secured credit facilities
consist of a $20.0 million revolving credit facility and $360.0 million in
aggregate principal amount of term loans. Loans under the senior secured
credit facilities will bear interest at a rate per annum equal to LIBOR plus a
margin of 2.125%. The term loans will mature in June 2019. The term loans are
repayable in 20 consecutive equal quarterly installments commencing in
September 2014. The revolving facility terminates in June 2019. The reduced
margin is equivalent to a cost reduction of $1.9 million per annum before
refinancing costs. Further, the new loan facilities have an improved repayment
profile compared to the existing facilities.

The loans will be borrowed by the borrowers, guaranteed by the Partnership and
secured by the Partnership’s vessels. Proceeds of the term loans will be used
to refinance the Partnership’s existing bank debt of $ 327 million and to
repay the seller’s credit to Knutsen NYK Offshore Tankers AS in the amount of
$10.6 million (including interest) related to the acquisition of the Carmen
Knutsen. The remaining amount will be used to pay transaction expenses and for
general partnership purposes. Closing of the new senior secured credit
facilities, which is anticipated to occur in the second half of June 2014, is
subject to the execution of security documents and satisfaction of customary
closing conditions.

As the Partnership’s management considers that the refinancing will generate
savings on financing costs, the management has on that basis recommended to
the board of directors of the Partnership that, upon closing of the senior
secured credit facilities, the board consider an increase in the Partnership’s
quarterly cash distribution of $0.02, an increase of 4.6 % (annualized
increase of $0.08 from the current annualized distribution rate of $1.74 per
common unit), which would become effective for the distribution with respect
to the quarter ending September 30, 2014. Any such increase would be
conditioned upon, among other things, the closing of the senior secured credit
facilities, approval of such increase by the board and the absence of any
material adverse developments that would make such an increase inadvisable.

KNOT owns, operates and acquires shuttle tankers under long-term charters in
the offshore oil production regions of the North Sea and Brazil. KNOT is
structured as a master limited partnership. KNOT’s common units trade on the
New York Stock Exchange under the symbol “KNOP.”

The statements in this press release that are not historical facts may be
forward-looking statements. These forward-looking statements, which include
statements related to increases in the Partnership’s distributions to
unitholders and the closing of the senior secured credit facilities and the
anticipated use of proceeds therefrom, are based upon the current beliefs and
expectations of KNOT’s management and are subject to risks and uncertainties,
which could cause actual results to differ from the forward-looking
statements. The information set forth herein should be read in light of such
risks. KNOT does not assume any obligation to update the information contained
in this press release.

Source: KNOT Offshore Partners LP


KNOT Offshore Partners LP
Arild Vik
Chief Executive Officer and Chief Financial Officer
Telephone: +44 7581 899 777
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