United Arab Shipping Company (UASC) closed a $1.3 biillion (USD) multi-tranche syndicated loan facility for the partial financing of seven 14,000 TEU container ships and five 18,000 TEU container ships. The facility is part of a larger $1.7 billion debt financing related to UASC’s announced $2.3 billion capital expenditure program for 17 newbuilding container vessels including, in total, 11 14,000 TEU and six 18,000 TEU vessels. Deutsche Bank AG, London Branch (DB) acted as Global Coordinator to UASC for the entire $1.7 billion debt financing. The 17 vessels include 10 vessels for which shipbuilding contracts were signed in August 2013 with the remaining seven vessels being option vessels. The process of option vessels is still continuing.
UASC has ordered the ultra large container ships from Hyundai Heavy Industries Co. Ltd. shipyard in South Korea. The giant box-ships, which are state of the art vessels capable of running on conventional fuel and liquefied natural gas, are scheduled for delivery between November 2014 and January 2016. The vessels will be deployed as part of a 10 year strategic vessel sharing agreement between UASC and China Shipping Container Lines.
The facility finances 75% of the cost of the vessels and is comprised of a $439 million commercial bank tranche (USD Commercial Tranche), a $300 million equivalent to Saudi Riyal tranche (SAR Commercial Tranche) and a $512 million tranche (K-sure Tranche) benefiting from 95% commercial and political risk insurance from Korea Trade Export Insurance Corporation (K-sure). All tranches are fully repaid within 12 years from drawdown. The transaction was closed in an accelerated time frame within three months of formal launch. The landmark deal is one of the largest ship financing deals of 2013 and is testament to the excellent relationships that UASC enjoys with K-sure and its lenders.
DB and Qatar National Bank S.A.Q. (QNB) acted as Joint Lead Underwriters and Lead Bookrunners for the Facility. The USD Commercial Tranche lenders include QNB, Arab Banking Corporation (B.S.C), Ahli United Bank B.S.C., and Deutsche Bank AG Filiale Deutschlandgeschäft, each acting as a Mandated Lead Arranger while DVB Group Merchant Bank (Asia) Ltd. (DVB) and BNP Paribas each acted as an Arranger.
Bank Saudi Fransi (BSF) underwrote the SAR Commercial Tranche and acted as SAR Bookrunner, Coordinating Mandated Lead Arranger, SAR Facility Agent and SAR Account Holder.