Seaspan announced that it has forward fixed contracts for 10 containerships with a major liner customer.
The vessels, representing approximately 100,000 TEU in aggregate, were previously scheduled to have four charters expire in 2022, four charters expire in 2023, and two charters expire in 2024. All 10 vessels have now been fixed through new five-year charter agreements, beginning at the end of their current charter periods. These forward fixed charters will generate approximately $670 million of additional gross contracted cash flow.1
Seaspan noted that it has secured forward fixing contracts for 58 vessels since the start of 2021, representing approximately 50% of its time chartered fleet. Forward fixing is entering into new charter agreements with customers well in advance of the expiry of the current charter agreements. These new fixtures commence upon expiry of the existing charter agreements.
Bing Chen, Chairman, President and CEO of Seaspan, commented, “We are pleased to facilitate our customer’s requirements by forward fixing another ten 10,000 TEU vessels, bringing the total forward fixed vessels to 58 in 2021. We continue to leverage our differentiated business model to provide creative customer solutions by forward fixing operating vessels and building new vessels. Seaspan now has no fleet roll-offs in 2021, and a limited number in 2022, 2023, and 2024, which insulates us from future market volatility while continuing to grow long-term quality cash flow through all market cycles.”
“I am proud of our collaborative customer partnerships that consistently create win-win solutions. Our customers continue to benefit from our excellent operational execution, quality fleet, unmatched scale, and flexibility. In addition, Seaspan continues to strengthen its differentiated business model by committing material future capacity in the current market. This mutually beneficial approach, built upon our long-term commitment and creative partnerships, facilitates our strategic customers’ success, contributes to market stabilization, and solidifies our market leadership position.”
1. The charters have a fixed rate for the first three years and the remaining term is based on a market rate within a certain floor and ceiling. The calculation is based on the minimum term of the charter and the floor rate for the period subject to market rates.