Containership leasing giant Seaspan Corp is continuing a revamp of its balance sheet by using cash to redeem some $300m in bonds.
Seaspan, a subsidiary of New York-listed Atlas Corp, said the 5.5% senior notes include $250m due in 2025 and $50m maturing in 2026. All are held by backer Fairfax Financial Holdings.
"We are very appreciative of our partnership with Fairfax and the strong support they have provided," said Atlas chief financial officer Graham Talbot.
"The investments made by Fairfax have helped to strengthen the company and create the significant momentum in the business that we have today.
"The redemption of these notes reflects Fairfax's continuing support as we mature and diversify Atlas' global investor base and increase access to capital market opportunities. This is also a further step in our ongoing efforts to simplify and optimize our capital structure."
Seaspan said the redemption price per note will be $1,000 plus all accrued and unpaid interest from 30 July to the redemption date.
In June, Atlas said the capital structure was being streamlined in a series of deals worth $935m in which it will exchange notes and redeem preferred shares.
The group is swapping $600m of notes held by Canadian backer Fairfax for preferred equity paying an annual dividend of 7%.
The debt had been due in 2025, 2026 and 2027, with a coupon of 5.5%.
At the end of June, Seaspan detailed $1.3bn of new lease financing as part of its huge newbuilding drive.
And it said it is closing in on deals to fund a further 24 new vessels.
The latest sale-and-leaseback financing relates to 13 vessels out of the 45 ordered since December. The company did not name the financiers involved.
The funded ships are costing Seaspan $1.4bn at a variety of shipyards.
They are expected to generate $2.7bn of contracted cash flow over the duration of their long-term charters.
After Atlas beat analyst expectations for second-quarter earnings on the back of a rampant containership market, Jefferies analyst Randy Giveans called the redemptions "an effort to position the company to attract a more broad base of investors".
Seaspan's fully delivered fleet consists of 186 containerships, representing total capacity of approximately 1.9m teu. The vessels have an average age of four years and a remaining lease period of about seven years.
