WFW advises Citibank and HSBC on the first CEA-backed JOLCOs of its kind for Seaspan

Watson Farley & Williams (“WFW”) advised Citibank NA, the London branch (“Citibank”) and HSBC Bank (“HSBC”) respectively on two separate JOLCOs (Japanese operating lease with call options) backed by the CEA entered into for Seaspan Corporation (“Espan”). These pioneering transactions were developed simultaneously and are the first of their kind, combining two proven vessel finance structures, ECA-backed loans and JOLCO sale-leaseback arrangements, and represent the first time that ECAs involved support JOLCO structures in maritime transport. A subsidiary of Atlas Corp., listed on the NYSE, Seaspan is a leading container rental company.

In connection with the Sinosure transaction, HSBC acted as global coordinator and lead bookrunner, ECA agent, facility agent and security guard; Citibank, Deutsche Bank AG, HSBC, Société Générale, Bank of China Limited, BNP Paribas and ING Bank, NV, as lead managers and mandated bookkeepers; Bank of Communications was the principal arranger and Standard Chartered Bank acted as the arranger for the financing. China Export & Credit Insurance Corporation (Sinosure) provided credit insurance policies for export buyers for the transaction.

Seaspan will use the proceeds of approximately US $ 838 million of this funding to finance eight new vessels, comprising four 12,000 TEU vessels and four 15,000 TEU vessels.

For Korean ships, Citibank acted as Global Coordinator, ECA Administrative Officer, Mandated Principal Arranger and Bookrunner; Citicorp International Limited acted as installation agent and security guard; Bank of America National Association, Bank of China Limited, Deutsche Bank AG, HSBC and Societe Generale as lead managers and mandated bookkeepers; E.Sun Commercial Bank and Standard Chartered Bank as arrangers; and the Export-Import Bank of Korea (“KEXIM”) as the lender for the financing. KEXIM provided a buyer credit guarantee as well as direct financing for the ECA JOLCO transaction. K-Sure has provided its Letter of Intent to strongly support the ECA JOLCO transaction.

FPG-AIM acted as JOLCO arranger and FPG acted as underwriter of JOLCO shares on transactions supported by China and Korea.

Seaspan will use the proceeds of this approximately $ 1.4 billion financing to finance ten new 15,000 TEU LNG vessels.

With these transactions, Seaspan secures the financing of its entire fleet of 70 new vessels, thereby consolidating its long-term liquidity. In accordance with Seaspan’s ESG policies, all funding documentation was in line with the Poseidon Principles, supporting the IMO’s goal of reducing total annual greenhouse gas emissions from shipping by at least 50% of by 2050.

WFW’s cross-border asset and structured finance team that advised both HSBC and Citibank was led by WFW Global Maritime Co-Head Lindsey Keeble for each ECA financing and Singapore partner Mehraab Nazir , for each JOLCO transaction. Mehraab and Lindsey were supported by Partner David Osborne, Senior Partner John Man, Partners Elizabeth Ilett and Stella Stathis and Intern Toby Hunt in London and Lawyer Lizzie Roe and Legal Director Arrow Zhang in Singapore. London partner Gary Walsh, senior partner Sarah Lunn and partner Julia Sim advised HSBC and Citibank on the respective agency and fiduciary facilities.

JunHe LLP acted as Chinese legal advisor, supporting the WFW team for the Sinosure transaction, while Kim & Chang provided Korean legal advice to WFW for the Korean ECA transaction.

Lindsey commented: “We are delighted to have advised Citibank and HBSC on these two highly innovative JOLCOs supported by ECA. Having been tasked with advising on these groundbreaking transactions underscores both WFW’s unparalleled ability to advise on the most complex and unique ship finance, and the strength of our international network in the maritime space ”.

Mehraab added: “These structures required finding legal solutions to a number of complex regulatory obstacles. It has been a fantastic team effort to work with the lenders, GIFs and the advisory team to complete these historic transactions ”.

Chris Conway, Citi Global Head of Shipping and Logistics, Export and Agency Finance, said: “In order to realize this innovative structure, it was important for us to have advisors familiar with the JOLCO structure who, from the start, would act as a real partner to develop the combination of this product with the financing of export agencies. It was a pleasure to have Lindsey, Mehraab and their teams supporting Citi by leading this combination of ECA and JOLCO for the first time in Korea ”.

White & Case advised FPG and Squire Patton Boggs acted for Seaspan.

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