Replies to post #141 on US Shipping Partners LP (fka USSPQ)

[ScovilleUnits]

Redfisher, I don’t grasp it in all it’s detailed glory but as best as I can tell after continuing to fail to meet the rules and regs set for loan repayments the lenders continue to figure it’s cheaper to keep her and once again extend the due date…but only by 10 days? That seemed a bit strange to me. Perhaps the near term conclusion, good or bad, is within 10 days away?

Following overview off page 34 of the last 10Q - - - - - -->

Amendment to Senior Credit Facility

On October 20, 2008, the Partnership and its lenders amended the Partnership’s Senior Credit Facility. The material changes to the Senior Credit Facility include:

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The lenders waived any potential defaults under the financial covenants for the quarters ended September 30, 2008 and December 31, 2008 through January 31, 2009.

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The margin over LIBOR that the Partnership pays as interest on its borrowings was increased from 3.5% to 5.25%, and a floor on the LIBOR rate of 3.25% was established, meaning that the minimum cash interest rate on our borrowings will be 8.5%.

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The Partnership will pay an additional 1.5% per annum in interest on outstanding borrowings, which additional interest will be paid-in-kind (“PIK interest”), and under certain circumstances the PIK interest rate will increase to 4.5% on January 31, 2009.

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A new financial covenant was added to the credit agreement that requires the Partnership to have cumulative Consolidated EBITDA (as defined in the Senior Credit Facility) for the period beginning September 1, 2008 and ending on the specified date as follows:

Month Ending             Cumulative Consolidated EBITDA 
 October 31, 2008              $                  4,000 
 November 30, 2008             $                  6,000 
 December 31, 2008             $                  9,000 
 January 31, 2009              $                 13,000

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The grace period before a payment default in respect of other indebtedness having a principal amount in excess of $1.0 million becomes an event of default under the senior credit agreement was eliminated.

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The Partnership is not permitted to pay any distributions on its common units until all borrowings under the senior credit agreement are paid in full.