Containership owner and operator Seaspan Corporation says it has completed full financing for its 70-vessel newbuild program.
The final $1.4 billion in financing closed on December 23, 2021, bringing its total financing proceeds to $6.9 billion.
The $1.4 billion will be used to finance ten 15,000 TEU LNG dual-fuel newbuild vessels and marks the last arrangement needed to fully finance its $7.6 billion newbuild program.
“We have now concluded binding financing arrangements for our full Newbuild Program, solidifying our long-term liquidity,” said Graham Talbot, CFO of Atlas and Seaspan. Seaspan is a wholly owned subsidiary of Atlas Corp. (NYSE: ATCO). “We have demonstrated consistent success in executing on attractive growth opportunities at the right time, while diligently managing associated risk. We do this by ensuring we enter into newbuild contracts only once a long-term lease is in place with one of our high-quality counterparties, and that we have a clear line of sight to financing the project.”
Seaspan charters its vessels primarily on long-term, fixed-rate time charters to the world’s largest container shipping lines. Its fleet consists of 134 vessels with a total capacity of 1,156,800 TEU, plus another 67 vessels under construction, increasing total capacity to 1,959,200 TEU. The 70-ship newbuild program includes three recently delivered ships.
The latest financing combines an export credit agency (“ECA”) backed loans supported by two Korean ECAs, the Korea Trade Insurance Corporation (“K-Sure”), and the Export–Import Bank of Korea (“KEXIM”), which is additionally providing a direct funding tranche, and sale-leaseback arrangements under special Japanese lease contracts (“JOLCOs”).
“Over the years, our partnership with Seaspan has yielded a number of innovative and value-added structures,” said Shreyas Chipalkatty, Citi Global Head of Shipping, Logistics & Offshore. Citibank, through its branches, acted as Global Coordinator, ECA Admin Agent, Mandated Lead Arranger and Bookrunner in the transaction. “With this transaction, we add yet another successful chapter to Seaspan’s story, and also develop the wider maritime asset financing market. It is a distinct honor to have been part of this journey with the Seaspan team and we look forward to continuing our successful collaboration in the new era that is emerging for the Maritime Logistics space.”
Chris Conway, Citi Global Head of Shipping and Logistics, Export and Agency Finance, added, “After a lengthy development period this innovative structure has been fully embraced by the Export Agency community as an important tool to help foster exports from the leading shipbuilders. We are very proud to have been able to lead this combination of ECA and JOLCO for the first time in Korea.”
“This Financing is our second ECA-JOLCO transaction, and only the second of its kind, which was developed with our partners at Citi, K-Sure, and KEXIM in parallel with a sister transaction announced in December,” said Talbot. “Creativity and strong global partnerships have allowed us to bring this structure to fruition, improving our credit quality and equity returns through long-tenor and remarkably low-cost funding.”
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