Seaspan Corporation, a wholly-owned subsidiary of Atlas Corp, has secured the last of its financings, representing a total investment of around US$ 76bn, for its full 70 vessel newbuild programme, including three vessels recently delivered.
Graham Talbot, CFO of Atlas and Seaspan, said: “We have now concluded binding financing arrangements for our full Newbuild Programme, solidifying our long-term liquidity. 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. 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. 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.”
The Financing combines two ship finance structures:
- 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”), providing Seaspan with meaningful benefits, including:
i) long-tenor financing covering construction through to 12-years post-delivery;
ii) meaningful enhancements in cost of secured debt; and,
iii) diversification of funding sources, including Japanese equity and ECA-backed syndicated bank loans.
This represents the first time Korean ECAs have provided export buyer credit insurance and a guaranteed tranche for a JOLCO transaction.
In line with Seaspan’s policies, the Financing documentation incorporates all requirements with respect to the Poseidon Principles.
