LONDON, Dec. 15, 2021 /CNW/ - Seaspan Corporation
("Seaspan"), a wholly owned subsidiary of Atlas Corp. ("Atlas")
(NYSE: ATCO), is proud to announce today fulsome details on
one of its financing arrangements previously identified in Atlas'
third quarter results released on November
8, 2021. This innovative financing arrangement is a
first-of-its-kind vessel financing (the "Financing"), combining two
existing asset financing structures to add long-dated and
attractively priced debt to Seaspan's capital structure. Proceeds
from the Financing totaling approximately $838 million will be used to finance eight
previously announced newbuild vessels, consisting of four 12,000
TEU and four 15,000 TEU vessels (the "Vessels"). Unchanged from
Atlas' third quarter results previously released, financing has
been secured for 60 of its 70 newbuild vessels (which includes
three vessel deliveries previously announced). Completion of
financing for the remaining 10 newbuild vessels continues to be
expected prior to year-end.
Transaction Highlights
This first-of-its-kind transaction combines two ship finance
structures, an export credit agency ("ECA") backed loan supported
by China Export & Credit Insurance Corporation ("Sinosure") and
sale-leaseback arrangements under special Japanese lease contracts,
providing Seaspan with meaningful benefits, including:
- Long tenor – 12-year tenor post-delivery with mortgage style
repayment, extends and diversifies Seaspan's maturity profile
- Low cost – meaningfully lowers pricing relative to existing
secured debt
- Fully funded construction cost – Provides partial funding of
pre-delivery installment payments, totaling approximately 30% of
the contract price, during construction, with full value of
construction price funded at delivery
- Diversifies funding sources – Combines Japanese equity (~25% of
the Financing) with an ECA backed syndicated loan (~75% of the
Financing)
Graham Talbot, CFO of Atlas and Seaspan, commented: "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. This was made possible by
Seaspan's position as an industry leader, and an innovator in ship
finance. 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 quality growth."
Transaction Structure
The Financing consists of two parts:
- 12-year syndicated loan backed by Sinosure, China's state owned ECA (the "ECA Facility")
and
- Sale-leaseback arrangements under special Japanese lease
contracts ("JOLCOs")
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.
Shuigen Pan, General Manager of
Sinosure Jiangsu Branch, commented: "The successful closing of the
Financing represents that the cooperation between Seaspan and
Sinosure has reached a new height. As the world leading independent
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."
Hisanaga Tanimura, Founder and
CEO of FPG, commented: "We are proud to be able to work together
with Seaspan again and are delighted to close this groundbreaking
structure. This transaction demonstrates our best-in-class
capabilities to arrange and structure innovative vessel financing
solutions in partnership with our customers. We look forward to
continuing to grow our relationship with Seaspan."
Sam Lippitt, Head of Export &
Asset Finance for the Americas at HSBC 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."
In line with Seaspan's policies, the Financing documentation
incorporates all requirements with respect to the Poseidon
Principles.
Advisors, Lenders, and Export Credit Agency
The Hongkong and Shanghai Banking Corporation Limited ("HSBC")
acted as ECA Agent, Global Coordinator and Lead Bookrunner;
Citibank, N.A., Deutsche Bank AG, HSBC, Societe Generale, Bank of
China Limited, BNP Paribas, and ING Bank, N.V., acted as Mandated
Lead Arrangers and as Bookrunners; Bank of Communications acted as
Lead Arranger, and Standard Chartered Bank acted as Arrangers for
the Financing.
Sinosure provided export buyer credit insurance policies for the
ECA JOLCO transaction, FPG-AIM acted as JOLCO Arranger, and FPG
acted as JOLCO Equity Underwriter.
Watson Farley Williams acted as
lenders counsel, in conjunction with Jun
He. White & Case advised FPG, and Squire Patton
Boggs acted for Seaspan.
About Atlas
Atlas is a leading global asset management company,
differentiated by its position as a best-in-class owner and
operator with a focus on deploying capital to create sustainable
shareholder value. Atlas brings together an experienced asset
management team with deep operational and capital allocation
experience. We target long-term, risk adjusted returns across
high-quality infrastructure assets in the maritime sector, energy
sector and other infrastructure verticals. Our two portfolio
companies, Seaspan Corporation and APR Energy Ltd. are unique,
industry-leading operating platforms in the global maritime and
energy spaces, respectively. For more information
visit atlascorporation.com.
About Seaspan
Seaspan is a leading independent owner and operator of
containerships. We charter our vessels primarily pursuant to
long-term, fixed-rate time charters to the world's largest
container shipping liners. Seaspan's operational fleet consists of
134 vessels with a total capacity of 1,156,800 TEU. We also have 67
vessels under construction, increasing total capacity of our
operational fleet to 1,959,200 TEU, on a fully delivered basis. For
more information visit seaspancorp.com.
Cautionary Note Regarding Forward-Looking Statements
This release contains certain forward-looking statements (as
such term is defined in Section 21E of the Securities Exchange Act
of 1934, as amended) concerning future events. Statements that are
predictive in nature, that depend upon or refer to future events or
conditions, or that include words such as "expects", "anticipates",
"intends", "plans", "believes", "estimates", "projects",
"forecasts", "will", "may", "potential", "should", and similar
expressions are forward-looking statements. These forward-looking
statements, reflect management's current expectations only as of
the date of this release. As a result, you are cautioned not to
rely on any forward-looking statements. Although these statements
are based upon assumptions that we believe to be reasonable based
upon available information, they are subject to risks and
uncertainties. These risks and uncertainties include, but are not
limited to, the factors detailed from time to time in our periodic
reports and filings with the SEC, including Atlas's Annual Report
on Form 20-F for the year ended December 31,
2020, filed with the SEC on March 19,
2021. We expressly disclaim any obligation to update or
revise any of these forward-looking statements, whether because of
future events, new information, a change in our views or
expectations, or otherwise. We make no prediction or statement
about the performance of any of our securities.
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SOURCE Atlas Corp.