Seaspan Corporation, a wholly owned subsidiary of NYSE-listed Atlas Corp, has announced the closing of an innovative US$838 million financing for new container ships.
The transaction combines a Japanese operating lease with call option (Jolco) with a 12-year syndicated loan backed by China Export & Credit Insurance Corporation (Sinosure). This is the first time an export credit agency (ECA) has provided export buyer credit insurance for a Jolco transaction. The financing will provide pre-delivery financing under the ECA facility, which will become a Jolco financing at delivery, subject to certain conditions.
Proceeds totalling approximately US$838 million will be used to finance eight previously announced newbuild vessels, consisting of four 12,000 TEU and four 15,000 TEU vessels.
HSBC acted as ECA agent, global coordinator and lead bookrunner. Citibank, Deutsche Bank, HSBC, Société Générale, Bank of China, BNP Paribas, and ING Bank acted as mandated lead arrangers and bookrunners. Bank of Communications acted as lead arranger, and Standard Chartered Bank acted as arranger for the financing.
Sinosure provided export buyer credit insurance policies for the ECA Jolco transaction, while Tokyo-based FPG-AIM acted as Jolco arranger, with FPG acting as Jolco equity underwriter.
Watson Farley Williams acted as the lenders' counsel, in conjunction with Jun He. White & Case advised FPG while Squire Patton Boggs advised Seaspan.
Seaspan says the 12-year tenor post-delivery financing with mortgage-style repayment extends and diversifies Seaspan’s maturity profile, while meaningfully lowering pricing relative to its existing secured debt.
It provides partial funding of pre-delivery installment payments, totalling approximately 30% of the contract price, during construction, with full value of construction price funded at delivery.
The deal provides diversification of funding sources by combining Japanese equity (25%) with an ECA-backed syndicated loan (75%).
“We are pleased to have collaborated with Seaspan in order to deliver a market first – a Sinosure-wrapped Jolco facility,“ says Sam Lippitt, head of export & asset finance for the Americas at HSBC. "Given the importance of China as a maritime exporter, we see enormous potential to roll this structure out in support of Atlas in the future.”
"Among other strategic benefits, through this transaction we’ve further developed our relationship with Sinosure – a critical partner in China – and with Japanese equity investors," comments Graham Talbot, chief financial officer of Atlas and Seaspan.
“We are committed to long-term strategic cooperation and welcome more Chinese newbuild orders from Seaspan,“ adds Shuigen Pan, general manager of Sinosure Jiangsu Branch.
Seaspan Corporation is a wholly owned subsidiary of NYSE-listed Atlas Corp. Atlas is a global asset management company, targeting long-term returns across infrastructure assets in the maritime sector, energy sector and other infrastructure verticals. Portfolio company Seaspan Corporation is a leading independent owner and operator of containerships.
Vessels are primarily chartered long-term to the world’s largest container shipping liners. Seaspan’s operational fleet consists of 134 vessels, with another 67 under construction.