Florens Container Inc, the wholly-owned subsidiary of Hong Kong-listed Cosco Pacific, has upsized its five-and-a-half-year loan for $74 million, tapping fully the over-subscription amount of $90 million. ING Bank and Rabobank are the mandated coordinating arrangers for the facility, which will be signed on July 12. The facility comprises of two tranches: tranche A for $44 million and tranche B for $46 million.
The facility pays a margin of 72.5bp and has an average life of 4.2 years with the first repayment commencing after 18 months. Arrangers receive participation fees of 86bp (all-in of 93bp) for commitments of $10 million or above, while co-arrangers receive 74bp (all-in of 90bp) for commitments of $5 million -$10 million.
The margin on the loan is almost a third cheaper than that paid by Florens on its six-year loan tapped in March 2001. ING Bank was the sole mandated arranger for the $100 million transaction that paid a spread of 120bp over Libor. As in the previous borrowing, the proceeds from the present loan will be used to buy new marine containers and refinance an existing debt facility. Tranche A will finance the lower of 60% of the net book value or 70% of the fair market value, whichever is lower, of a portfolio of marine containers currently owned by Florens Container. Tranche B will finance 80% of net book value of new marine containers.
The facility will be secured by the underlying containers to be purchased and refinanced and will be jointly and severally guaranteed by Cosco Pacific and Florens Container Inc. Florens' container fleet mainly consists of dry containers with an average life of four years and a utilization rate of 91%, the highest in the industry. Cosco Pacific is the sixth-largest container leasing company in the world and intends to add 90,000 teus (20-feet equivalent units) this year to the 610,019 teus it already owned at the end of 2001.
The final allocations for the $90 million loan are as follows:
Florens Container Inc $90 million loan | Allotted Commitment Amount (US$) |
Co-ordinating Arrangers |
|
ING Bank N.V. | 15,000,000 |
Rabobank Hong Kong Branch | 15,000,000 |
|
|
Arrangers |
|
Commerzbank Aktiengesellschaft, Hong Kong Branch | 15,000,000 |
The Bank of Tokyo-Mitsubishi, Ltd., New York Branch | 10,000,000 |
Chekiang First Bank Ltd., San Francisco Agency | 10,000,000 |
Liu Chong Hing Bank Limited, San Francisco Branch | 10,000,000 |
National Australia Bank Limited | 10,000,000 |
|
|
Co-Arranger |
|
UFJ Bank Limited | 5,000,000 |
Total | 90,000,000 |
|
|
