Credit Agricole, Others Provide Hapaq-Lloyd $372MM Vessel Financing

Hapag-Lloyd and a banking syndicate signed a $372 million facility agreement with a term of 12 years yesterday. The company said it will use the loan to finance five new vessels which were ordered in April 2015 for delivery between October 2016 and May 2017. The total investment volume of the order lays in the mid three-digit million US dollar range.

Hapaq-Lloyd said the banking syndicate was led by joint bookrunners Credit Agricole, DNB, HSBC and UniCredit. As the order was placed with a Korean shipyard, 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 decided in parallel to increase its existing revolving credit facility with the financing banking syndicate from US$ 95 million to $200 million in order to strengthen its liquidity reserves at attractive financing conditions.

Based on the recent ship financing, Hapag-Lloyd also successfully renegotiated conditions for existing vessel financing facilities. In total, the company was thereby able to decrease its interest burden by approximately $40 million over the remaining life of these financing facilities.

The five ordered vessels will be deployed primarily on the South American routes and will have a capacity of 10,500 standard containers (TEU) each. With 2,100 reefers plugs each, the vessels are particularly suitable to carry perishable goods. With the investment, Hapag-Lloyd intends to strengthen its position as one of the largest reefer carriers in the world.

“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.”

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