Derivative Instruments (Predecessor) (Predecessor)

4 Months Ended

Jul. 28, 2013

Predecessor

Derivative Instruments

Derivative Instruments

13.Derivative Instruments

The Owning Companies use interest rate swaps for the management of interest rate risk exposure. The interest rate swaps effectively convert a portion of the Company’s debt from a floating to a fixed rate. To hedge its exposure to changes in interest rates the Company is a party to five floating-to-fixed interest rate swaps with RBS covering notional amounts aggregating approximately $136,718,000 as of March 31, 2013.

On March 31, 2005 and April 3, 2007 Cetus Transport Ltd entered into an interest rate swap agreement with RBS with effective date November 21, 2006 and November 17, 2006 respectively and termination dated November 21, 2018 and November 17, 2018. Under the terms of this arrangement the Company swaps the notional amount outstanding under the agreement from a floating rate of interest to a fixed rate of 5.395% and 4.936% respectively. The original notional amount of $51,140,000 is reduced semi-annually by $1,278,500 with a final settlement of $20,456,000 due in November, 2018.

On March 9, 2007 and February 7, 2012, Lyra Gas Transport Ltd entered into an interest rate swap agreement with RBS with effective date March 22, 2007 and September 24, 2011 respectively and termination dated March 22, 2019. Under the terms of this arrangement the Company swaps the notional amount outstanding under the agreement from a floating rate of interest to a fixed rate of 4.772% and 2.960% respectively. The original notional amount of $64,146,313 is reduced semi-annually by $1,700,000 with a final settlement of $28,900,000 due in March 22, 2019.

On January 8, 2009, Cepheus Transport Ltd entered into an extendable interest rate swap agreement with the RBS with effective date July 21, 2008 and termination dated July 21, 2014. RBS holds the right to extend the interest rate swap until the July 21 2020. Under the terms of this arrangement the Company swaps the notional amount outstanding under the agreement from a floating rate of interest to a fixed rate of 4.35%. The original notional amount of $68,800,000 is reduced semi-annually by $1,720,000 with a final settlement of $29,240,000 due in July 21, 2020.

The effect of derivative instruments on the combined statements of operations for the periods April 1, 2013 to July 28, 2013 and year ended March 31, 2013 is as follows:

Derivatives not designated as hedging instruments	Location of gain/(loss) recognized	April 1, 2013 to July 28, 2013 (Unaudited)			Year endedMarch 31, 2013
Interest Rate Swap—Change in fair value	Gain/(loss) on derivatives, net	$	4,684,007		$	(13,680	)
Interest Rate Swap—Realized loss	Gain/(loss) on derivatives, net	(1,853,802		)	(5,574,799		)
Loss on derivatives—net		$	2,830,205		$	(5,588,479	)