CSSC enters into sale and leaseback agreement worth $30 million USD with Star Bulk for the acquisition of the vessel Star Eleni (Linked to Project ID#92116, #92119)

On December 13, 2017, CSSC (Hong Kong) Shipping Co., Ltd. (CSSC) and Star Bulk Carriers (Star Bulk) entered into a sale and leaseback agreement worth $30 million USD for the acquisition of the Star Eleni shipping vessel, owned by Star Bulk. The vessel was leased back to Star Bulk for a period of 10 years in a bareboat charter agreement, with an unknown variable interest rate. The agreement allows for purchase options that can be exercised by Star Bulk on a monthly basis at any point throughout the 10 year bareboat charter agreement. Star Bulk took delivery of the Star Eleni on January 3, 2018. An identical sale and leaseback agreement was signed for the Star Eleni's sister ship, the Star Leo on May 2, 2018 (captured via Project ID#92219). In September 2018, Star Bulk exercised its purchase options on both the Star Eleni and Star Leo, buying out the ships for $28.7 million USD and $29.4 million USD, respectively. The funding for exercising the options was provided by China Merchants Bank Leasing (captured via Project ID#92116).

Additional details

1. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. 2. A ‘bareboat charter’ is a charter in which the owner of the boat leases only the vessel (with no crew) to the charterer or lessee (in this case, Star Bulk). 3. Star Bulk Carriers was incorporated in 2006 and is based in Marousi, Greece.

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