China Eximbank contributes $47.460 million to tranche as part of a $203.4 million USD syndicated loan for the acquisition of three 8,530 TEU container ships by Danaos Corporation (Linked to Record ID#91078 and #91081)

Project narrative

On February 21, 2011, the Export-Import Bank of China and Citibank N.A. signed a $203.4 million USD syndicated senior secured credit facility with three Liberia-incorporated vessel owning companies, Teucarrier (No.2) Corp., Teucarrier (No.3) Corp., and Teucarrier (No.4) Corp., all wholly owned subsidiaries of Greek shipping company Danaos Corporation (DAC), for the post-delivery financing of the acquisition of three 8,530 Twenty Foot Equivalent Unit (TEU) newbuilding container ships, the CMA CGM Tancredi, the CMA CGM Bianca, and the CMA CGM Samson. This loan consisted of three tranches, each worth $67,800,000 USD and one for each borrower. China Eximbank contributed $47,460,000 USD to each tranche for an aggregate amount of $142,380,000 USD. The London Branch of Citibank N.A. contributed $6,780,000 USD to each tranche for an aggregate amount of $20,340,000 USD. ABN AMRO Bank N.V. contributed $13,560,000 USD to tranche for an aggregate amount of $40,680,000 USD. Record ID#90777 captures China Eximbank's $47.460 million USD contribution to the tranche to Teucarrier (No. 2) Corp. China Eximbank’s contributions to the tranches to Teucarrier (No. 3) Corp. and Teucarrier (No. 4) Corp. are captured via Record ID#91078 and Record ID#91081, respectively. The overall credit facility carried a final maturity date of 10 years after the delivery of each vessel (a maturity period of 10 years). The principal and interest payments borrowings under the facility bore interest at an annual interest rate of LIBOR plus a margin of 2.85% (payable semi-annually in arrears) and a default (penalty) interest rate of 2%. The borrowers were required to repay principal amounts drawn under each tranche in consecutive semi-annual installments over a ten-year period commencing from the delivery of the respective newbuilding vessels through the final maturity date of the tranches and repay the respective tranche in full upon the loss of the respective newbuilding. China Eximbank and Citibank, N.A. served as mandated lead arrangers. Danaos Corporation was the guarantor. Citibank, N.A. served as the global coordinator. The New York Branch of Citibank, N.A. was the original hedging bank. The London Branch of Citibank International PLC served as the agent of the other Finance Parties. The Greece Branch of Citibank International PLC served as security agent and security trustee for the secured policies. The London Branch of Citibank, N.A., acting through its Agency and Trust business, was the account bank. ABN AMRO Bank N.V. joined the loan syndicate on June 14, 2011. China Export & Credit Insurance Corporation (Sinosure) provided a credit insurance policy for the loan. The insurance premium was $8,798,148.66 USD payable in dollars to Sinosure and the insured party was Citibank, N.A. The Sinosure-CEXIM Credit Facility was secured by (i.e. collateralized against) customary post-delivery shipping industry collateral with respect to the vessels: the CMA CGM Tancredi, the CMA CGM Bianca, and the CMA CGM Samson. Additionally, under this facility, Danaos was not permitted to pay cash dividends or repurchase shares of its capital stock unless its consolidated net leverage fell below 6:1 for four consecutive quarters and the ratio of the aggregate market value of its vessels to its outstanding indebtedness exceeded 125% for four consecutive quarters, provided that a default did not occur and Danaos was, after giving effect to the payment of the dividend, in breach of any covenant. The facility also contained customary events of default, including those relating to cross-defaults to other indebtedness, defaults under its swap agreements, non-compliance with security documents, material adverse changes to its business, a Change of Control as described above, a change in Danaos' Chief Executive Officer, its common stock ceasing to be listed on the NYSE (or Nasdaq or another recognized stock exchange), a change in any material respect, or breach of the management agreement by, the manager for the mortgaged vessels and cancellation or amendment of the time charters (unless replaced with a similar time charter with a charterer acceptable to the lenders) for the mortgaged vessels. As of June 30, 2013, $172.9 million USD was outstanding under the credit facility, with no remaining borrowing availability under the facility. As of December 31, 2014, $142.4 million USD was outstanding under the credit facility, with no remaining borrowing availability under the facility. The facility was amended and restated, effective on June 30, 2013, to align its financial covenants with a bank agreement Danaos signed with other creditors. Under this amendment for this facility, Danaos was required to maintain a ratio of the market value of all vessels in its fleet, on a charter-inclusive basis, plus the net realizable value of any additional collateral, to its consolidated total debt above specified minimum levels, to gradually increase from 90% through December 31, 2011 to 130% from September 30, 2017 through September 30, 2018; maintain minimum free consolidated unrestricted cash and cash equivalents, less the amount of the aggregate variable principal amortization amounts of $30.0 million USD at the end of each calendar quarter; ensure that its consolidated total debt less unrestricted cash and cash equivalents to consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) (defined as net income before interest, gains or losses under any hedging arrangements, tax, depreciation, amortization and any other non-cash item, capital gains, or losses realized from the sale of any vessel, finance charges, and capital losses on vessel cancellations and before any non-recurring items and excluding any accrued interest due to Danaos but not received on or before the end of the relevant period, provided that non-recurring items excluded from this calculation did not exceed 5% of EBITDA calculated in this manner) for the last twelve months did not exceed a maximum ratio gradually decreasing from 12:1 on December 31, 2010 to 4.75:1 on September 30, 2018; ensure that the ratio of its consolidated EBITDA for the last twelve months to net interest expense (defined as interest expense (excluding capitalized interest), less interest income, less realized gains on interest rate swaps (excluding capitalized gains) and plus realized losses on interest rate swaps (excluding capitalized losses)) exceeds a minimum level of 1.50:1 through September 30, 2013 and thereafter gradually increasing to 2.80:1 by September 30, 2018; and maintain a consolidated market value adjusted net worth (defined as the amount by which Danaos' total consolidated assets adjusted for the market value of its vessels in the water less cash and cash equivalents in excess of our debt service requirements exceeds its total consolidated liabilities after excluding the net asset or liability relating to the fair value of derivatives as reflected in Danaos' financial statements for the relevant period) of at least $400 million USD. On August 10, 2018, Danaos Corporation amended and restated the Sinosure-CEXIM credit facility, which had $71.2 million USD outstanding as of June 30, 2018, to align its financial covenants with those contained in its new 2018 credit facilities and provide second lien collateral to lenders under certain of Danaos' new credit facilities. Teucarrier (No. 2) Corp. owned the vessel the CMA CGM Tancredi; Teucarrier (No. 3) Corp. owned the vessel CMA CGM Bianca; and Teucarrier (No. 4) Corp. owned the vessel CMA CGM Samson. The shipbuilder was Shanghai Jiangnan Changxing Heavy Industry Company Limited. In March 2007, Danaos Corporation signed shipbuilding contracts for four 6,800 TEU vessels with China Shipbuilding Trading Company, Limited. The vessels were expected to be delivered to DAC during the second and third quarters of 2010. On July 17, 2007, Danaos announced that it reached an agreement with China Shipbuilding Trading Company, Limited to amend its earlier order for four 6,800 TEU containerships and upgrade it to four 8,400 TEU vessels. In September 2007, Danaos extended its shipbuilding contract with China Shipbuilding Trading Company, Limited to include an additional post-Panamax 8,530 TEU vessel, with delivery now expected between August 2010 and February 2011. Danaos Corporation took delivery of the vessels in 2011.