CSSC enters into sale and leaseback agreement worth $34.8 million USD with Star Bulk for the acquisition of the Katie K cargo ship (HN 1388) (Linked to Project ID#92162, #92163)

In 2018, CSSC (Hong Kong) Shipping Co., Ltd. (CSSC) and Star Bulk Carriers (Star Bulk) entered into a sale and leaseback agreement worth $34.8 million USD for the acquisition of the Katie K (HN 1388) Newcastlemax shipping vessel. 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. At the end of the 10-year bareboat charter, Star Bulk is obligated to purchase the vessel from CSSC at a price of $10.44 million USD. The funds from the agreement sale and leaseback and two identical agreements allowed Star Bulk to purchase this ship, along with two others, the Debbie H (HN 1389) (captured via Project ID#92162) and the Star Ayesha (HN 1390) (captured via Project ID#92163) from Oceanbulk Container Carriers, LLC. The Katie K was delivered on April 16, 2019.

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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