Navigator Holdings Ltd., the owner and operator of the world’s largest fleet of handysize liquefied gas carriers, announces today that certain of its subsidiaries have entered into financing arrangements to finance the construction and delivery of two newbuild gas carriers currently under construction in China by Jiangnan Shipyard (Group) Co. Ltd. and China Shipbuilding Trading Co. Ltd. (jointly the “Shipyard”), pursuant to shipbuilding contracts entered into in 2024, as previously announced on November 20, 2024. Delivery of the Vessels is expected in 2027.
To fund construction-stage obligations, the Company’s subsidiary, Navigator Gas L.L.C. (the “Borrower”), has entered into a secured pre-delivery term loan of up to $164,640,000 with BNP PARIBAS (acting through its Tokyo Branch) (the “Bridge Facility”). The Bridge Facility will finance up to 80% of the Borrower’s payments of pre-delivery instalments to the Shipyard.
On delivery of the Vessels, the Bridge Facility will be refinanced by, and transition into, a $205,800,000 long-term sale and leaseback arrangement under a Japanese Operating Lease with Call Option (“JOLCO”), Navigator Gas’ first financing using this structure, and one which will cover the full purchase price of the Vessels alongside very competitive pricing.
In accordance with the terms of the JOLCO, on delivery the Vessels will be sold to special purpose companies acting as owners (the “Lessor Owners”) and immediately bareboat chartered back to the Company’s subsidiaries, Navigator Polaris L.L.C. and Navigator Proxima L.L.C. as charterers. Navigator Gas will at all times retain full responsibility for the commercial and technical operation of the Vessels, including crewing, maintenance, insurance and management, and will benefit from purchase options under the relevant bareboat charters, the last of which occurs eight and a half (8.5) years after each vessel delivery.
The Bridge Facility and JOLCO arrangements are secured by customary pre- and post-delivery security packages respectively, including, among other things, assignments of the shipbuilding contracts and refund guarantees.
Gary Chapman, Chief Financial Officer, commented:
“This financing reflects our continued commitment to disciplined capital allocation and our ability and desire to access diverse and cost-effective funding solutions. The structure provides long-term financing, and the introduction of the JOLCO structure into Navigator’s portfolio marks a further step in the evolution of our funding strategy, again backed by high-quality financial partners whose support we greatly value. This financing also now marks the completion of funding for four of our six newbuild vessels on order, with financing for the remaining two vessels progressing well.”