ICBC signs $682.8 million sale-leaseback agreement with Teekay LNG Partners L.P. for four LNG carrier newbuildings

In December 2016, Teekay LNG Partners L.P., a company incorporated under the laws of the Republic of the Marshall Islands, entered into a 10-year $682.8 million sale-leaseback agreement with ICBC Financial Leasing Co., Ltd. (or ICBC Leasing) for four wholly-owned LNG carrier newbuildings equipped with the M-type, Electronically Controlled, Gas Injection (or MEGI) twin engines delivering in 2017 and 2018. At such dates, ICBC Leasing was expected t take delivery and charter each respective vessel back to Teekay LNG Partners. At the end of the 10-year tenor of these leases, Teekay LNG Partners had an obligation to repurchase the vessels from ICBC Leasing. The third vessel in the series is named the Torben Spirit, and was scheduled to be delivered in February 2017. The specific details of the deal are unknown.

Additional details

1. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. 2. This deal could be related to the three sale-leaseback agreements between Teekay LNG Partners and ICBC signed on Dec 20, 2016: Agreement dated December 20, 2016 for a sale-leaseback agreement between DSME Hull No. 2416 L.L.C. and Hai Jiao 1605 Limited (a subsidiary of ICBC Financial Leasing Co., Ltd.); Agreement dated December 20, 2016 for a sale-leaseback agreement between DSME Option Vessel No.1 L.L.C. and Hai Jiao 1606 Limited (a subsidiary of ICBC Financial Leasing Co., Ltd.); and Agreement dated December 20, 2016 for a sale-leaseback agreement between DSME Option Vessel No.3 L.L.C. and Hai Jiao 1607 Limited (a subsidiary of ICBC Financial Leasing Co., Ltd.). However, there is no clear reference to ICBC in these agreements. This issue warrants further investigation.

Number of official sources

7

Number of total sources

9