CDB Leasing enters into a sale and leaseback agreement worth $514.28 million with Dynagas for the acquisition of LNG shipping vessels Clean Planet and Clean Ocean

In December 2017, China Development Bank Financial Leasing Co., Ltd. (CDB Leasing), through two special purpose vehicles, entered into a sale and leaseback agreement worth USD 514.28 million with Dynagas -- a Marshall Islands-incorporated shipowner -- for two liquid natural gas-carrying vessels, the Clean Planet and the Clean Ocean, both of which are identical vessels. CDB Leasing purchased the two vessels for USD 363.8 million, leasing them back to Dynagas for 12 years with an estimated interest of USD 150.4 million. Upon expiration of the lease agreement, Dynagas is obligated to buy back the two ships from CDB Leasing. Whether or how the two ships are collateralized against is unclear. Both ships -- Clean Planet and Clean Ocean -- are ice-class 1A LNG carriers, completed in 2014 by Hyundai Heavy Industries with capacities of 162,000 cubic meters. The market value of the two ships was assessed at USD 428 million in 2017. The two vessels recorded losses of USD 12.8 million in 2015 and profits of USD 1.4 million in 2016. Both vessels had charter contracts beginning in 2019 to work on the Chinese state-owned bank-financed Yamal LNG project in Siberia, Russia (captured via Project ID#67041, #67064, #67062, #67063, #67040).

Additional details

1. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products.

Number of official sources

1

Number of total sources

7