Seaspan has announced a US $1.4bn financing deal for ten LNG dual-fuel 15,000 TEU newbuild vessels, securing full financing for Seaspan’s entire 70 vessel newbuild fleet.
The transactions were developed simultaneously and are firsts of their kind, combining two tried and tested ship financing structures, including 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). The second structure is a sale-leaseback arrangement 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.
Watson Farley & Williams (WFW) advised Citibank N.A., London Branch and HSBC Bank on both transactions.
“We have now concluded binding financing arrangements for our full newbuild program, 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,” said Graham Talbot, CFO of Atlas and Seaspan.