Seaspan closes $838M loan for 8 new containerships

Hong Kong-based containership owner and operator Seaspan Corporation, part of Atlas Corp., has completed an export credit agency- (ECA) backed $838 million financing.

Seaspan will use the proceeds to finance eight newbuild vessels comprised of four 12,000 TEU and four 15,000 TEU containerships.

Previously identified in Atlas’ third quarter results, the financing arrangement is a first-of-its-kind vessel financing combining two existing asset financing structures to add long-dated and attractively priced debt to Seaspan’s capital structure.

Unchanged from Atlas’ third quarter results previously released, financing has been secured for 60 of its 70 newbuild vessels. Completion of financing for the remaining 10 newbuild vessels continues to be expected prior to year-end.

Specifically, this first-of-its-kind transaction combines two ship finance structures, an ECA-backed loan supported by China Export & Credit Insurance Corporation (Sinosure) and sale-leaseback arrangements under special Japanese lease contracts, providing Seaspan with several benefits.

“This financing has been a significant investment in time for our team, laying groundwork over a period of several years, but the reward is a financing with both long tenor and remarkably low-cost, from construction to 12 years post-completion,” Graham Talbot, CFO of Atlas and Seaspan, commented.

“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. With this closing, we have concluded financings for 60 of our 70 newbuild vessels, solidifying our long-term liquidity and enabling continued … growth.”

This transaction represents the first time an ECA has provided export buyer credit insurance for a JOLCO transaction and involved complex structuring with various parties. The financing will provide pre-delivery financing under the ECA facility, which will become a JOLCO financing at delivery, subject to certain conditions.

“The successful closing of the financing represents that the cooperation between Seaspan and Sinosure has reached a new height. As the … containership lessor, we are committed to long term strategic cooperation and welcome more Chinese newbuild orders from Seaspan. We are also looking forward to exploring new horizons on innovative and win-win project paradigms between us,” Shuigen Pan, General Manager of Sinosure Jiangsu Branch, commented.

“We are pleased to have collaborated with Seaspan in order to deliver a market first – a Sinosure wrapped JOLCO facility. 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,” Sam Lippitt, Head of Export & Asset Finance for the Americas at HSBC, said.

In line with Seaspan’s policies, the financing documentation incorporates all requirements with respect to the Poseidon Principles, according to the company.