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Overview

CMB Leasing enters into sale and leaseback agreement valued at $38.5 million with Capital Product Partners L.P. for the acquisition of the M/V Athos (Linked to Record ID#92125)

Commitments (Constant USD, 2023)$39,721,752
Commitment Year•2020Country 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
Jan 20, 2020
Last repayment (originally scheduled)
Jan 18, 2025

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

  • CMB Financial Leasing Co., Ltd. (CMB Financial Leasing) (CMBF) (CMBFL)

Receiving agencies

Private Sector

  • Capital Clean Energy Carriers Corp. (formerly Capital Product Partners L.P.)

Loan description

CMB Leasing enters into sale and leaseback agreement valued at $38.5 million with Capital Product Partners L.P. for the acquisition of the M/V Athos

Grant element•11.1947%Interest rate (t₀)•4.3795%Interest type•Variable Interest RateMaturity•5 years

Narrative

Full Description

Project narrative

On January 20, 2020, CMB Financial Leasing Co., Ltd. (CMB Leasing) and Capital Product Partners L.P., a Marshall Islands-incorporated shipping conglomerate, entered into a sale and leaseback agreement valued at USD 38.5 million for the acquisition of Capital Product Partners' M/V Athos. The lease agreement has a duration of five years, with an interest rate of LIBOR plus 2.55%. The agreement includes a purchase option to acquire the vessel upon expiration of the lease for USD 22.5 million and requires a payment of USD 7.5 million to CMB Leasing if the option is not exercised. There are also additional purchase options beginning with the first anniversary of the agreement. The full amount of USD 38.5 million was drawn on January 23, 2020. An identical agreement was signed for the M/V Athos' sister ship, M/V Aristomenis on January 20, 2020 (captured in Record ID#92125).

Staff comments

1. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products. 2. AidData has calculated LIBOR as being 1.839%, based on the 6-month LIBOR in January 2020 (https://www.global-rates.com/en/interest-rates/libor/american-dollar/2020.aspx). Hence, the interest rate has been calculated as (1.839% + 2.55% = 4.389%).