Seaspan unit obtains $1 billion five-year secured credit facility

By Sarah Lizee

Olympia, Wash., May 16 – Seaspan Corp. wholly owned subsidiary Seaspan Holdco III Ltd. entered into a credit agreement on Wednesday that provides for a $1 billion secured credit facility due May 15, 2024, according to an 8-K filing with the Securities and Exchange Commission.

The facility consists of a $200 million revolver and an $800 million term loan.

Citibank, NA is the administrative agent and lead bookrunner. Citibank, Bank of Montreal and Wells Fargo Bank, NA are mandated lead arrangers and bookrunners. BNP Paribas, National Australia Bank Ltd. and Societe Generale, Hong Kong Branch are lead arrangers, and Bank Sinopac is co-documentation agent. Citigroup Global Markets Inc. is the structuring agent.

The borrower may request an increase in commitments by a total amount of up to $1 billion.

Interest is Libor plus 225 basis points.

There is a 25 bps commitment fee. It steps up to 50 bps when less than 50% of commitments are used.

Proceeds will be used to repay 12 secured credit facilities and for general corporate purposes. They may be used in part to finance the acquisition of vessels.

The borrower is required to maintain a borrowing base ratio of not more than 1 to 1 and a debt service coverage ratio of not less than 1.25 to 1.00.

Seaspan Corp. as guarantor is required to maintain consolidated tangible net worth equal to or in excess of $450 million; total borrowings at less than 65% of its total assets; an interest and principal coverage ratio equal to or greater than 1.1 to 1.0; and no cross default, subject to limited exceptions.

Hong Kong-based Seaspan provides ship-management services and leases on containerships.

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