S&P rates Seaspan, notes BB-

S&P said it gave BB- ratings to Seaspan Corp. and its planned $500 million of senior unsecured notes due 2029. The notes’ recovery rating is 4.

“Our rating on Seaspan incorporates the company's position as the world's leading containership charterer, which is a competitive advantage and contributes to operating stability. Seaspan is a leading independent owner and charterer of containerships globally. It leases its vessels primarily under long-term, fixed-rate, time charters to the largest container shipping liners. The fleet consists of 127 containerships (as of March 31, 2021) with a total capacity of about 1.1 million 20-foot-equivalent units (TEU),” S&P said in a press release.

The agency noted Seaspan has contracts in place for all its capacity for the rest of this year, more than 88% in 2022 and about 80% in 2023, all of which are noncancellable and U.S. dollar denominated.

Seaspan is expected to use the proceeds primarily toward funding its expanding fleet of new build containerships.

The outlook is stable, reflecting an expectation Seaspan will maintain an adjusted funds from operations (FFO) to debt ratio above 12% over the next few years amid its fleet expansion.

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