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Seaspan weighs a variety of markets to cut debt, including 2019 bonds
By Devika Patel
Knoxville, Tenn., April 27 – Seaspan Corp. is focused on tapping different unsecured debt markets to pay down leverage, particularly its bonds that come due in 2019.
“We’ve had very high cash balances that we want to maintain and we’ve been using the money primarily to reduce debt,” chief financial officer David Spivak said on the company’s first quarter earnings conference call on Thursday.
“Last year we raised a fair bit of equity and we wanted to bring down the leverage.
“The thinking behind that was we wanted to get our credit metrics where we could access a variety of unsecured debt markets and that’s where we’ve been focusing a lot of our time, prioritizing different markets to access,” Spivak said.
He noted that the company may issue unsecured debt in the next three to six months .and intends to continue paying down its 2019 unsecured bonds.
“We do intend in the next three to six months to raise unsecured debt capital in those markets.
“We started to buy back a bit of our 2019 unsecured bonds, so when we look at it, there’s a lot of different financing tools available to us,” he said.
Spivak said that the company is considering a variety of markets to repay the debt, including the bank market.
“We do intend on tapping a few different markets over the next 12 months just to take care of [the 2019 debt].
“In addition to that, there’s obviously refinancing and the bank market, which we may do some of that as well, but that’s probably not our key focus right now,” he said.
Seaspan’s cash balance at the end of the quarter was about $296 million.
The company’s net debt to EBITDA ratio at the end of the quarter was 1.7x, below its target of 2x.
Seaspan is a Hong Kong-based containership company.
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