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Global Ship Lease high yield bond offering underlines continued energy in shipping financing market

Allen & Overy said today the USD360 million bond offering and related super senior term loan from Global Ship Lease highlights the energetic nature of the shipping financing market, as market players seek to diversify their funding sources by tapping the debt capital markets and taking advantage of the low interest rate environment to realise their business plans.

Global Ship Lease owns and charters out containerships under mainly long-term, fixed-rate charters to top tier container liner companies including CMA CGM and Orient Overseas Container Line (OOCL). It owns 18 vessels, all of which are currently fixed on time charters.

The company used the proceeds of the super senior term loan facility and the 9.875% bonds due 2022, to refinance existing 10% first priority secured notes due 2019 and repay the company’s existing revolving credit facility and secured term loan.

The Allen & Overy team advising Citi in its role as arranger, bookrunner, facility agent and lender in respect of the super senior term loan was led by London-based structured and asset finance partners David Smith and Kevin Young, working with senior associate Linda Roxburgh and associate Josh Davis.

David commented: “We’ve seen an increase in activity in the shipping bond markets in 2017 and we expect it will continue well into next year. The low interest rate environment, combined with investors’ continued hunt for yield means the dynamics are right.”

Kevin added: “Shipping businesses are adapting to a new funding landscape as certain traditional ship finance banks move away from extending loans to this sector and the debt capital markets are fulfilling a vital need.”

The broader finance team incorporated partner Roger Lui and associate Wilber Yim in Hong Kong, and partner Niels de Ru and associate Ninwa Alan in Amsterdam. London partner James Graham and associate Megan Lawrence provided intercreditor advice alongside partner Jonathan Heeringa and associate Marlise Seckel in Amsterdam. U.S.-qualified London capital markets partner Adam Kupitz and senior associate Zachary Scott advised Citi as security agent.
Source: Allen & Overy

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