Wallenius Wilhelmsen lands $800 mln in sustainability-linked loans

Oslo-listed shipping company Wallenius Wilhelmsen has secured $800 million of new loans secured by 20 vessels.

The flagship facilities consist of two new financing agreements, with tenors ranging from 5.5 to 6.5 years and were signed with 11 banks on June 30th. On August 15th, $670 million was drawn down, mainly to repay $569 million of existing vessel debt. The remaining $130 million is available as a revolving credit line and can be used for general corporate purposes.

The financings are issued under Wallenius Wilhelmsen’s sustainability-linked financing framework, and. interest margins will be adjusted on an annual basis.

Namely, if the company achieves the interim CO2-intensity target, the margin will reduce -0.05 percentage points for the next year. If the company fails to hit the target the margin will increase +0.05 percentage points for the next year.

“We are happy to close the flagship facilities with our banks at attractive pricing linked to our emission reductions”, says Torbjørn Wist, CFO at Wallenius Wilhelmsen.

Wallenius Wilhelmsen said that it had managed to reduce CO2e-intensity by 33.6 percent from 2008 to 2019 and that it plans to cut it by a further 27.5 percent from 2019 to 2030.

“We are working to cut emissions systematically through a wide range of operational, technical and asset replacement initiatives. Some of these produce an effect on the shorter term, while the benefit of others will be realized over the 30-year lifetime of vessels. In short, we need to drive energy efficiency both day-to-day and over the long term,” says Wist.

“The new financings allow us to extend debt maturities, stretch repayment profiles and build financing capacity for future investment needs.”

The agreements are secured by 20 sailing vessels with an average age of 12 years and a market value of $ 1.4 billion. As part of the transaction, five older vessels become debt free, increasing the company’s unencumbered fleet to 12 vessels.

As part of its decarbonization efforts, last year Wallenius Lines booked the construction of up to six pure car carrier (PCC) vessels at Chinese shipyard CIMC Raffles. The 200-meter long and 37-meter wide vessels will feature 6,500 CEU. They will be LNG-powered.

The company has also embarked upon an ambitious project of building a  7,000 CEU RoRo vessel that will use wind as the main form of propulsion.

The Oceanbird vessel concept is fitted with five wing sails, each at around 80 meters high. The array of rigid wing sails, built from steel and composite materials, generate forward movement instead of vertical lift. These wing sails will be able to turn 360° to make optimal use of the wind and can be lowered to pass under bridges.

The company operates over 130 vessels servicing 16 trade routes to six continents. The Wallenius Wilhelmsen group consists of Wallenius Wilhelmsen Ocean, Wallenius Wilhelmsen Solutions, EUKOR and ARC.