Announces Significant Enhancements and Total
Capacity Increase to its Industry-Leading
Innovative
$2.5 billion Portfolio Financing
Program
LONDON, May 24, 2021 /PRNewswire/ - Seaspan
Corporation ("Seaspan"), a wholly owned subsidiary of Atlas Corp.
("Atlas") (NYSE: ATCO), has entered into a note purchase agreement
to issue, in a private placement (the "Private Placement"),
$500 million principal amount of
fixed rate, sustainability-linked senior secured notes (the
"Notes"), of which $450 million
principal amount was issued and sold on Friday, May 21, 2021 and $50 million is expected to be issued and sold on
August 12, 2021, subject to customary
closing conditions. The Private Placement, which involved over 20
prominent investors, was completed as part of Seaspan's amended and
upsized $2.5 billion vessel portfolio
financing program (the "Program") and constitutes the largest
reported sustainability-linked US private placement. The Program,
which was initially established in 2019, is now comprised of
$2.0 billion of bank credit
facilities and $500 million of the
Notes.
Key Highlights
- Largest reported US private placement in shipping – With more
than $1 billion in demand, the
Private Placement received significant interest from prominent
investors, predominately in North
America.
- Largest reported sustainability-linked US private placement –
Largest reported and first in the transportation sector.
Sustainalytics, a Morningstar company and a global leader in ESG
research, ratings, and data, delivered a Second Party Opinion
confirming alignment of the Notes with the Sustainability-Linked
Loan Principles which have been jointly developed by the leading
loan market associations in Europe, Asia,
and the United States.
- Expansion of the Program reflective of Seaspan growth –
Increase in capacity to $2.5 billion,
including the Notes, expansion of syndicate to over 30 banks and
over 20 institutional investors, and enhancements to existing
Program debt reflective of Seaspan's quality growth.
- Enhancement of terms of the bank credit facilities under the
Program – Reduced pricing approximately 20%, extended maturities,
improved advance rates against assets, and increased revolver to
$400 million, among other
improvements.
US Private Placement
The Private Placement, placed with over 20 institutional
investors within the insurance industry, received significant
demand from the North American market and was oversubscribed,
resulting in longer terms and tight credit spreads. The Notes form
part of the Program, which was established in 2019 and has evolved
to become one of Seaspan's key competitive advantages.
The $500 million of Notes comprise
four series, each ranking pari passu with
existing and future Program debt and with the following term, size,
and initial interest rate:
Term
(Years)
|
Series Size
($USD)
|
Initial Interest Rate
(%)
|
Issue Date
|
10 years
|
$150
million
|
3.91%
|
May 21,
2021
|
10 years
|
$50
million
|
3.91%
|
August 12,
2021
|
12 years
|
$170
million
|
4.06%
|
May 21,
2021
|
15 years
|
$130
million
|
4.26%
|
May 21,
2021
|
The weighted average maturity of the Notes is approximately 12.0
years, and the weighted average initial interest rate is
approximately 4.1%. The Notes are non-amortizing.
Amended & Upsized $2.5
Billion Program
On May 19, 2021, Seaspan entered
into amendments and restatements of the senior secured loan
facilities and intercreditor and proceeds agreement that comprise
the Program. In connection with such amendments and restatements,
Seaspan achieved significant enhancements to its industry-leading
innovative Program, including:
- Increase in capacity to an aggregate of $2.5 billion, including the Notes;
- Increase in size of revolving credit facility from $300 million to $400
million;
- Additional $180 million of
commitments under the bank loan facilities (the "Upsize");
- Extension of maturities of tranches due 2024 and 2025 by
approximately two years;
- Reduction of average interest rate margins of existing tranches
by approximately 20%;
- Higher advance rates under the Program;
- Broader syndicate of over 30 banks and over 20 institutional
investors; and
- BBB- (watch upgrade) rating from Kroll Bond Rating Agency
The incremental Program debt is expected to be drawn over the
next six months. The net proceeds of the Private Placement and the
Upsize are intended to be used to finance or refinance the
acquisition of vessels and for general corporate purposes. Proceeds
of the Private Placement may also be used to repay a portion of the
bank credit facility debt under the Program.
Bing Chen, President and CEO of Atlas, commented, "I'm proud of
our team's consistent leadership in developing the industry's
innovative financial solutions. This transaction both further
solidifies our balance sheet and provides competitive and flexible
long-term funding to facilitate our proven quality growth
throughout market cycles. The Notes were oversubscribed by a strong
group of prominent global investors, which clearly demonstrates the
increasing interest and growing sponsorship Atlas is receiving
within the global investment community. Atlas' resilient business
model and quality growth continues to generate significant and
attractive opportunities to lead industry innovations and
strengthen our competitiveness."
Graham Talbot, CFO of Atlas,
commented, "Closing of these transactions marks a major milestone
in the evolution of our capital structure. While the road started
years ago, in the last six months alone we have diversified our
capital sources into multiple new institutional markets through
three issuances of senior unsecured notes and have now completed
the first sustainability linked US private placement in the
Transportation sector. We now have over $1
billion in liquidity to allocate between our capex program
and further balance sheet optimization. We continue to execute and
proactively fund quality growth opportunities while prudently
managing our balance sheet and delivering dependable and consistent
returns to both our equity and credit investors."
Sustainability Feature
Pricing of the Program debt, including the Notes, is subject to
adjustment based on Seaspan's achievements relative to two key
performance indicators (KPIs):
- The first indicator aims at measuring the alignment of the
carbon intensity of the collateral vessels with the International
Maritime Organization (IMO) 2050 decarbonization trajectory. The
structure is inspired by the Poseidon Principles, the global
framework by which financial institutions can assess the climate
alignment of their ship finance portfolios.
- The second aims at fostering cooperation with charterers in
order to advance the decarbonization agenda, by seeking to include
sustainability-linked provisions in future agreements.
Advisors & Lenders
Citigroup Global Markets Inc. acted as Sole Structuring Agent
for the Program. Société Générale acted as Lead Sustainability
Coordinator for the Program. The bank portion of the Program
includes a syndicate of lenders, led by Citibank, N.A., Société
Générale, Hong Kong Branch, Bank
of Montreal, National Australia
Bank Limited, Wells Fargo Bank, N.A., BNP Paribas, Bank of America,
N.A. as Mandated Lead Arrangers & Joint-Bookrunners.
The Notes have not been and will not be registered under the
Securities Act of 1933 or the securities laws of any state or other
jurisdiction and may not be offered or sold in the United States or any other jurisdiction
absent registration or an exemption from the registration
requirements of the Securities Act of 1933 and the applicable
securities laws of any state or other jurisdiction.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any offer or
sale of, the Notes in any jurisdiction in which the offer,
solicitation or sale of the Notes would be unlawful prior to the
registration or qualification thereof under the securities laws of
any such state or jurisdiction.
About Atlas
Atlas is a leading global asset management
company, differentiated by its position as a best-in-class owner
and operator with a focus on deploying capital to create
sustainable shareholder value. Atlas brings together an experienced
asset management team with deep operational and capital allocation
experience. We target long-term, risk adjusted returns across
high-quality infrastructure assets in the maritime sector, energy
sector and other infrastructure verticals. Our two portfolio
companies, Seaspan Corporation and APR Energy Ltd. are unique,
industry-leading operating platforms in the global maritime and
energy spaces, respectively.
About Seaspan
Seaspan is a leading independent owner
and operator of containerships. We charter our vessels primarily
pursuant to long-term, fixed-rate time charters to the world's
largest container shipping liners. As at March 31, 2021, Seaspan's fleet consisted of 127
containerships representing total capacity of approximately
1,073,200 TEU. On May 19, 2021, we
announced the delivery of two second-hand vessels. We also
have 37 vessels under construction and expect to take delivery of
two additional second-hand vessels in the near term, increasing
total capacity to 1,670,200 TEU, on a fully delivered basis. For
more information, visit www.seaspancorp.com.
Cautionary Note Regarding Forward-Looking Statements
This release contains certain forward-looking statements (as such
term is defined in Section 21E of the Securities Exchange Act of
1934, as amended) concerning future events, including
forward-looking statements regarding the issue and sale of
$50 million of Notes in August 2021 (the "2nd Closing") and
the use of proceeds of the Private Placement and Upsize. Statements
that are predictive in nature, that depend upon or refer to future
events or conditions, or that include words such as "expects",
"anticipates", "intends", "plans", "believes", "estimates",
"projects", "forecasts", "will", "may", "potential", "should", and
similar expressions are forward-looking statements. These
forward-looking statements reflect management's current
expectations only as of the date of this release. As a result, you
are cautioned not to rely on any forward-looking statements.
Although these statements are based upon assumptions that we
believe to be reasonable based upon available information, they are
subject to risks and uncertainties. These risks and uncertainties
include, but are not limited to: the risk that the 2nd
Closing may not be consummated; the use of the net proceeds of the
Private Placement and Upsize; and other factors detailed from time
to time in our periodic reports and filings with the SEC, including
Atlas's Annual Report on Form 20-F for the year ended December 31, 2020 filed with the SEC on
March 19, 2021. We expressly disclaim
any obligation to update or revise any of these forward-looking
statements, whether because of future events, new information, a
change in our views or expectations, or otherwise. We make no
prediction or statement about the performance of any of our
securities.
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SOURCE Atlas Corp.