Performance Shipping Inc. Secures Sale and Leaseback Agreement for Newbuilding LR1 Tanker

Core Viewpoint - Performance Shipping Inc. has entered into a sale and leaseback agreement for its new LR1 tanker vessel, M/T P. San Francisco, which is under construction and scheduled for delivery in early 2027 [1][2]. Financing Details - The total bareboat financing amount is US$37.8 million, with the vessel sold and chartered back for a ten-year period at a daily rate of US$5,451, implying an interest rate of Term SOFR plus 2.00% per annum [2]. - A balloon payment of approximately US$18.1 million is due with the last installment, and the company has options to repurchase the vessel at predetermined rates after the second anniversary of the charter [2]. Strategic Insights - The financing arrangement secures 70% of the vessel's contract price, reflecting a conservative cash flow breakeven level of US$22,200 per day [3]. - The vessel has been chartered to Mercuria Energy Trading S.A. for four years at a daily gross charter rate of US$23,750, providing coverage above the cash flow breakeven level, with options for three additional one-year extensions [4]. - This financing aligns with the company's strategy of fleet renewal, deployment, and balanced financial management [4].