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Overview

ICBC contributes $32.6 million to $150 million loan to finance the acquisition of 13,100 TEU newbuilding vessel

Commitments (Constant USD, 2023)$37,049,807
Commitment Year•2011Country of Activity•Marshall IslandsDirect Recipient Country of Incorporation•Marshall IslandsSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Aug 19, 2011
Start (actual)
Aug 19, 2011
First repayment (originally scheduled)
Dec 30, 2019
Last repayment (originally scheduled)
Dec 29, 2022

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% Chinese ownership

Funding agencies

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Cofinancing agencies

Private Sector

  • MUFG Bank, Ltd. (Formerly Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU))

Receiving agencies

Private Sector

  • Seaspan Corporation

Implementing agencies

Private Sector

  • Seaspan Corporation

Loan description

ICBC contributes $32.6 million to $150 million loan to finance the acquisition of 13,100 TEU newbuilding vessel

Grace period•9 yearsGrant element•30.4243%Interest rate (t₀)•5.053%Interest type•Variable Interest RateLoan tenor•3-month rateMaturity•12 years

Narrative

Full Description

Project narrative

On August 19, 2011, the Industrial and Commercial Bank of China (ICBC) and the Bank of Tokyo Mitsubishi UFJ, Ltd. (BTMU) entered into non-recourse loan facility agreement in an amount up to $150,000,000 USD with Seaspan Corporation. The facility is divided into two tranches: Tranche A of $117.4 million funded by BTMU and Tranche B of $32.6 million funded by ICBC. The loan is intended for the financing of the acquisition of one 13,100 TEU newbuilding vessel. The interest of the loan is payable quarterly and is calculated at the LIBOR rate for the relevant three-month period plus a margin of 0.99% for Tranche A and 4.75% for Tranche B. The recipient company is subject to a commitment fee of 1% per annum calculated on the undrawn amounts under the facility. The term of the lease is 12 years beginning from the vessel’s delivery date. The first repayment is due at the beginning of year nine, and a final payment of approximately $12.3 million will be required upon maturity of the tranche in 2024. As of December 31, 2011, the carrying value of the vessel being funded under this facility was $89,790,000 (2010— $69,072,000), and the vessel had not yet been delivered. This project is currently in implementation.

Staff comments

1. Seaspan is a leading independent charter owner and operator of containerships with industry-leading integrated ship management services. Seaspan charters its vessels primarily pursuant to long-term, fixed-rate time charters to seven of the world's top eight container shipping liners. Seaspan's fleet consists of 123 containerships, including five vessels Seaspan has agreed to purchase, which have not yet been delivered, representing a total capacity of approximately 1,023,000 TEU. Seaspan's current operating fleet of 118 vessels has an average age of approximately seven years and an average remaining lease period of approximately four years, on a TEU-weighted basis. 2. AidData has calculated the all-in interest rate (5.04324%) for Tranch B -- the tranche financed by ICBC -- by adding the margin (4.75%) to the average 3-month LIBOR rate in August 2011 (0.29324%)