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Overview

CSSC enters into sale and leaseback agreement worth USD 30 million with Star Bulk for the acquisition of the vessel Star Leo (linked to Record ID#s #92116, #92118)

Commitments (Constant USD, 2023)$30,188,889
Commitment Year•2018Country of Activity•Marshall IslandsDirect Recipient Country of Incorporation•Marshall IslandsSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 2, 2018
Start (actual)
May 14, 2018
End (actual)
Sep 1, 2018
Last repayment
Apr 29, 2028

Stakeholders

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

Funding agencies

State-owned companies

  • CSSC (Hong Kong) Shipping Co., Ltd.

Receiving agencies

Private Sector

  • Star Bulk Carriers Corp.

Loan desecription

CSSC enters into sale and leaseback agreement worth USD 30 million with Star Bulk for the acquisition of the vessel Star Leo

Interest type•UnknownMaturity•10 years

Narrative

Full Description

Project narrative

On May 2, 2018, CSSC (Hong Kong) Shipping Co., Ltd. (CSSC) and Star Bulk Carriers (Star Bulk) entered into a sale and leaseback agreement worth USD 30 million for the acquisition of the Star Leo 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 Leo on May 14, 2018. An identical sale and leaseback agreement was signed for the Star Leo's sister ship, the Star Eleni on December 13, 2017 (captured in Record ID#92118). In September 2018, Star Bulk exercised its purchase options on both the Star Eleni and Star Leo, buying out the ships for USD 28.7 million and USD 29.4 million, respectively. The funding for exercising the options was provided by China Merchants Bank Leasing (captured in Record ID#92116).

Staff comments

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 (in this case, CMBL) leases only the vessel (with no crew) to the charterer or lessee (in this case, Star Bulk).