Hong Kong-based container ship owner Seaspan Corp. said Monday its creditors agreed to expand the company's borrowing limit to $1.3 billion in order to help expansion efforts.
Seaspan's amended credit facility, which previously had a $1 billion borrowing limit, also has a revolving feature that will allow it to borrow, repay and borrow again.
As collateral, Seaspan pledged the 23 vessels in its initial contracted fleet and four vessels purchased from A.P. Moller-Maersk in 2006.
The company said it will be able to borrow up to $1.3 billion until Aug. 11, 2012 without adding additional collateral as long as the outstanding balance is less than 70 percent of the vessels' fair market value.
Starting Aug. 11, 2012, the borrowing limit will be reduced by $32.5 million per quarter until May 11, 2014, when the outstanding loan balance will be due and payable.
The company said it has the right, subject to certain conditions, to add more vessels as collateral to preserve access to the full borrowing amount.
In a statement, Chief Executive Gerry Wang said the amended credit facility will help the company expand the fleet and manage its capital structure.
"Our calculations show that we will have quick access to over $550 million beyond what is needed to finance the 27 vessels in the initial collateral package," Wang said. "This will give us a substantial competitive advantage as we pursue acquisitions going forward."
Citigroup Global Markets Ltd. and Fortis Capital Corp. acted as joint arrangers, while Citigroup, Fortis, Credit Suisse, DnB Nor Bank ASA and Landesbank Hessen-Thuringen were mandated lead arrangers.
Shares of Seaspan fell 13 cents to $28.57 in afternoon trading.
Seaspan's amended credit facility, which previously had a $1 billion borrowing limit, also has a revolving feature that will allow it to borrow, repay and borrow again.
As collateral, Seaspan pledged the 23 vessels in its initial contracted fleet and four vessels purchased from A.P. Moller-Maersk in 2006.
The company said it will be able to borrow up to $1.3 billion until Aug. 11, 2012 without adding additional collateral as long as the outstanding balance is less than 70 percent of the vessels' fair market value.
Starting Aug. 11, 2012, the borrowing limit will be reduced by $32.5 million per quarter until May 11, 2014, when the outstanding loan balance will be due and payable.
The company said it has the right, subject to certain conditions, to add more vessels as collateral to preserve access to the full borrowing amount.
In a statement, Chief Executive Gerry Wang said the amended credit facility will help the company expand the fleet and manage its capital structure.
"Our calculations show that we will have quick access to over $550 million beyond what is needed to finance the 27 vessels in the initial collateral package," Wang said. "This will give us a substantial competitive advantage as we pursue acquisitions going forward."
Citigroup Global Markets Ltd. and Fortis Capital Corp. acted as joint arrangers, while Citigroup, Fortis, Credit Suisse, DnB Nor Bank ASA and Landesbank Hessen-Thuringen were mandated lead arrangers.
Shares of Seaspan fell 13 cents to $28.57 in afternoon trading.