Hapag-Lloyd Secures Financing for Five Newbuilds

Container shipper Hapag-Lloyd announced it has signed a 12-year $372 million facility agreement with a banking syndicate to finance the construction of five new vessels ordered from a South Korean shipbuilder Hyundai Samho Heavy Industries (HSHI) in April 2015.

Hapag-Lloyd did not specify the total investment volume of the order, but said it lies in the mid three-digit million dollar range. 

The five new 10,500 TEU vessels, due for delivery between October 2016 and May 2017, will be deployed primarily on the South American routes and will expand the shipper’s reefer capacity with 2,100 reefers plugs each. Each of the new ships is 333 meters long and 48 meters wide.

“We secured the financing for our new vessels at attractive financial terms,” said Nicolás Burr, Chief Financial Officer at Hapag-Lloyd. “In addition, based on this new benchmark we were able to significantly reduce our interest burden and at the same time gain more financial flexibility by increasing our liquidity commitments.”

The banking syndicate was led by joint bookrunners Credit Agricole, DNB, HSBC and UniCredit. The Korean Export Credit Agencies K-sure and KEXIM agreed to provide financing support for Hapag-Lloyd to facilitate the investment with the Korean yard and will thereby support the overall financing. Hapag-Lloyd said it decided in parallel to increase its existing revolving credit facility with the financing banking syndicate from $95 million to $200 million in order to strengthen its liquidity reserves at attractive financing conditions.

Based on the recent ship financing, Hapag-Lloyd said it was also able to renegotiate conditions for existing vessel financing facilities, in total decreasing its interest burden by approximately $40 million over the remaining life of the financing facilities.