Squire assists Seaspan in innovative structured financings

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Squire assists Seaspan in innovative structured financings

Squire Patton Boggs has advised independent containerships owner Seaspan Corporation on securing two separate export credit agency (ECA)-backed Japanese Operating Lease with Call Options (JOLCOs) totalling USD838 million and USD1.4 billion.

The transactions involved the creation of a unique financing structure by combining ECA-backed debt financing and JOLCOs into one arrangement.

The team advising Seaspan on both transactions was led by Singapore-based partner Kate Sherrard and supported by senior associate Chua Aik Hui and associate Quah Jun Wei in Singapore, registered foreign lawyer Bernice Chia in Hong Kong, and partner Tomohiko Kamimura in Tokyo.

“The transactions involved complex structuring to take into account the unique arrangement with Japanese lessors and policy and regulatory requirements of each of the various ECAs,” said Sherrard.

Seaspan will use the proceeds from the financing, which totalled approximately USD838 million, to finance eight new-build vessels, consisting of four 12,000 twenty-foot equivalent unit (TEU) and four 15,000 TEU vessels pre-and post-delivery.

The first transaction involved securing a syndicated loan backed by China Export & Credit Insurance Corporation, China’s state-owned ECA, with sale-leaseback arrangements under JOLCOs. The large syndicate involved HSBC as global coordinator and lead bookrunner, ECA agent, facility agent and security agent.

The USD1.4 billion financing involved loans supported by two Korean ECAs, the Korea Trade Insurance Corporation and the Export-Import Bank of Korea.