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

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

Number of official sources

2

Number of total sources

2