ICBC provides $150 million loan for acquisition of two shipping vessels (Hull No. S452 and Hull No. 2177)

Project narrative

On December 28, 2007, the Industrial and Commercial Bank of China entered into a secured reducing revolving $150,000,000 credit facility agreement with Seaspan Finance II Co. Ltd. and Seaspan Finance III Co. Ltd., two special purpose vehicles and wholly-owned subsidiaries of Seaspan Corporation that are incorporated under the laws of the Republic of the Marshall Islands. The loan was intended to finance the construction of two of the company’s 13100 TEU vessels, Hull No. S452 and 2177, one of which will be built by Hyundai Heavy Industries Co., Ltd., and the other which will be constructed by Hyundai Samho Heavy Hyundai Industries Co., Ltd.. The interest of the loan is calculated as LIBOR (4.825% based on 2007 December 6-month USD LIBOR) plus the margin of 0.8% per annum, summed to be 5.625%. The credit agreement also requires payment of a commitment fee of 0.20% per annum calculated on the undrawn, uncanceled portion of the facility. The final maturity date is the earlier of the 12th anniversary of the delivery date of the last vessel delivered and October 17, 2023. Under the agreement, the facility will be proportionately reduced to the extent that a vessel is not delivered by October 27, 2011. Commencing on the earlier of six months after the delivery date of the last vessel and April 27, 2012, the facility will reduce by consecutive semi-annual reductions in the amounts and on the dates set out in a schedule to the credit agreement, and on each such date, the recipient must prepay the amount of the outstanding loan that exceeds the amount of the reduced facility. The outstanding loans under the facility must be paid in full by the final maturity date. During the year, Seaspan Corporation removed one of the two vessels under this facility and is therefore only able to borrow up to a maximum of $75.0 million, or 65% of the vessel delivered costs. As of December 28, 2007, there have been $50.0 million drawn out of the $150 million available under this facility. Hull No. 2177 was delivered on 11/6/2010 and Hull S452 was delivered on December 4, 2018.