UASC closes landmark US$ 1,251 million syndicated loan facility

United Arab Shipping Company (UASC) closed a US$ 1,251 million multi-tranche syndicated loan facility for the partial financing of 7 x 14,000-TEU container ships and 5 x 18,000-TEU container ships.

The facility is part of a larger US$ 1,744 million debt financing related to UASC's announced US$ 2,300 million capital expenditure program for 17 newbuilding container vessels including, in total, 11 x 14,000-TEU and 6 x 18,000-TEU vessels. Deutsche Bank AG, London Branch (DB) acted as Global Coordinator to UASC for the entire US$ 1,744 million debt financing. The 17 vessels include ten 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 US$ 439 million commercial bank tranche, a US$ 300 million equivalent to Saudi Riyal tranche and a US$ 512 million 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 3 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. < Korea Shipping Gazette >