Seaspan announced the closing of its new $1.0 billion portfolio financing program. The Program consists of pari passu ranking senior secured loan facilities, guaranteed by Seaspan, including a $200 million revolving credit facility (“RCF”) and an $800 million term loan facility (“TLA”). A conference call will be held to discuss details of the transaction.
The Program can be increased to $2.0 billion through additional commitments under the RCF and TLA, execution of additional secured loan agreements and/or issuing private placement notes, in each case with a corresponding expansion of the collateral pool. The Program provides Seaspan with the flexibility to add, substitute and remove vessels during the term, subject to a borrowing base, portfolio concentration limits, absence of defaults, and compliance with financial covenants. The Program will initially consist of a portfolio of 36 vessels.
Net proceeds from the Program are intended to be used to repay 12 secured credit facilities, for general corporate purposes, and may be used in part to finance the acquisition of vessels.
Highlights of the Program
- Streamlines secured credit structure by refinancing 12 existing facilities into one Program
- Innovative flexibility to add/remove vessels and draw/repay debt, pursuant to a borrowing base
- Meaningfully lower average interest margin relative to refinanced facilities
- Improves amortization profile over next five years
- Provides attractive financing option for our fleet over time
David Sokol, Chairman of Seaspan Corporation commented, “This is a first of its kind financing in the shipping space, and demonstrates our management team’s forward thinking. Our team has brought best in class concepts from various industries together to create an innovative structure that should change the way in which Seaspan, and the rest of the shipping sphere do business.”
Ryan Courson, Chief Financial Officer said, “Our innovative $1.0 billion portfolio financing program is a significant step forward in the evolution of Seaspan’s capital structure. We intend to use the proceeds to repay existing secured debt, and expect to be leverage neutral post-transaction. At the outset, the Program reduces our cost of debt, and improves our maturity profile. Longer term, we expect that this structure will provide several key benefits, including simplification of our capital stack, meaningful enhancement of financing flexibility, and increased control over debt maturity and amortization, which we believe over time will effectively provide permanent corporate debt financing.”
Advisors & Lenders
Citigroup Global Markets Inc. acted as Sole Structuring Agent; Citibank N.A. acted as Lead Bookrunner and Mandated Lead Arranger; Wells Fargo Bank, N.A. and Bank of Montreal acted as Bookrunners and Mandated Lead Arrangers; BNP Paribas, National Australia Bank Limited, and Société Générale acted as Lead Arrangers; Bank Sinopac acted as Co-Documentation Agent; and ABN AMRO Capital USA LLC., Bank of America, N.A., Canadian Imperial Bank of Commerce, Canadian Western Bank, CTBC BANK CO., LTD., Fédération des caisses Desjardins du Québec, JPMorgan Chase Bank, N.A., and Coast Capital Savings Federal Credit Union acted as Lenders for the Program.