Container ship owner Seaspan has gone back to bondholders with a better offer in a bid to avoid having to buy back its $300m notes series due in 2026.
Earlier in December, the giant company, part of US-listed Atlas Corp, launched a bid to amend the terms of the debt, which carries a coupon of 6.5%.
Seaspan’s imminent $10.9bn takeover by leading shareholders including Fairfax Financial Holdings and the Washington family would trigger a bond delisting clause that gives holders a put option at 1% above par.
Seaspan had offered an 8% fee to change this clause.
A new filing reveals that following talks with certain bondholders, this has been increased to 8.5%.
Seaspan called this “commercially attractive”.
Bond trustee Nordic Trust wrote to investors saying it had been told this was the "best and final offer."
Seaspan views the deal as an “attractive yield”, given the group’s strong and stable credit profile backed by substantial locked-in cash flows of about $18.3bn over the next 20 years, the letter reveals.
The tonnage provider also said it has sufficient liquidity, through $1.1bn in undrawn revolving credit facilities and $6bn in untapped newbuilding finance, to meet capital requirements should the deal be rejected.
Two-thirds majority needed
Fearnley Securities had earlier called the 8% offer “meaningful.”
Seaspan needs two-thirds of bondholders to vote in favour of the change.
The vote does not apply to the $200m 2024 bond.
Parent Atlas has agreed to accept an all-cash takeover offer at $15.5 per share in a move expected to see the stock delisted from the New York Stock Exchange next year.
The deal places the company in the hands of Poseidon Acquisition Corp, an entity formed by certain affiliates of Fairfax Financial Holdings, the Washington Family and Atlas chairman David Sokol.
The majority shareholders, who already hold 68% of the Atlas stock, will now acquire outstanding shares they do not already own.
Ocean Network Express (ONE), the Singapore-based container ship operation of Japan’s Mitsui OSK Lines, NYK Line and K Line, is also participating in the bid.
