Seaspan's Innovative $838 Million Financing Deal

Seaspan Corporation, a subsidiary of Atlas Corp., has announced the closing of a groundbreaking $838 million financing arrangement. This innovative structure combines two existing financing mechanisms to support the construction of eight new containerships, enhancing Seaspan’s fleet and financial standing.

Key Features of the Financing

This deal leverages a blend of an export credit agency (ECA) backed loan, insured by China Export & Credit Insurance Corporation (Sinosure), and sale-leaseback arrangements under special Japanese lease contracts (JOLCOs). The financing package offers several strategic benefits:

- Extended Tenor: The 12-year post-delivery mortgage-style repayment structure extends and diversifies Seaspan’s debt maturity profile.
- Cost Efficiency: The arrangement significantly lowers the pricing relative to existing secured debt.
- Construction Funding: The deal covers about 30% of pre-delivery installment payments and fully funds the construction costs upon delivery.
- Funding Diversification: It combines Japanese equity (approximately 25%) with an ECA backed syndicated loan (around 75%).

Graham Talbot, CFO of Atlas and Seaspan, highlighted the substantial effort invested over the years to achieve this low-cost, long-term financing. He emphasized Seaspan’s innovative approach to ship finance and strong relationships with Sinosure and Japanese equity investors. This deal secures financing for 60 of the 70 newbuild vessels, ensuring long-term liquidity and supporting Seaspan’s growth.

Detailed Transaction Structure

The financing consists of a 12-year syndicated loan backed by Sinosure and sale-leaseback arrangements via JOLCOs. This marks the first instance of an ECA providing export buyer credit insurance for a JOLCO transaction, requiring complex structuring and coordination among various parties. The pre-delivery financing under the ECA facility transitions to JOLCO financing upon delivery, contingent on meeting certain conditions.

Shuigen Pan, General Manager of Sinosure Jiangsu Branch, noted that the successful closing of this financing elevates the cooperation between Seaspan and Sinosure, opening doors for more Chinese newbuild orders and innovative projects.

Hisanaga Tanimura, Founder and CEO of FPG, praised the partnership with Seaspan, underscoring the groundbreaking nature of this structure and its demonstration of FPG's expertise in innovative vessel financing.

Sam Lippitt, Head of Export & Asset Finance for the Americas at HSBC, expressed satisfaction with the collaboration that led to this market-first Sinosure wrapped JOLCO facility. He acknowledged the significant potential for this structure to support Atlas in the future, given China's role as a major maritime exporter.

Supporting Partners and Advisors

Key entities involved in this transaction include:

- HSBC: Acted as ECA Agent, Global Coordinator, and Lead Bookrunner.
- Mandated Lead Arrangers and Bookrunners: Citibank, Deutsche Bank, HSBC, Societe Generale, Bank of China, BNP Paribas, ING Bank.
- Lead Arranger: Bank of Communications.
- Arranger: Standard Chartered Bank.
- Insurance Provider: Sinosure for export buyer credit insurance.
- JOLCO Arranger: FPG-AIM.
- JOLCO Equity Underwriter: FPG.
- Legal Advisors: Watson Farley Williams and Jun He for lenders; White & Case for FPG; Squire Patton Boggs for Seaspan.

This transaction also aligns with the Poseidon Principles, integrating environmental and sustainability considerations into the financing documentation.

About Atlas Corp. and Seaspan

Atlas Corp. is a premier global asset management company focusing on high-quality infrastructure assets, with Seaspan Corporation as one of its key portfolio companies. Seaspan is a leading independent owner and operator of containerships, primarily chartering its fleet through long-term, fixed-rate contracts to major container shipping liners. With 134 vessels in operation and 67 under construction, Seaspan continues to expand its fleet to meet global demand.

For further details, visit Seaspan Corporation