Singaporean container shipping company Ocean Network Express (ONE) has secured a US$396mn package from a group of commercial banks and Japan’s export finance institutions, backing its acquisition of container vessels.
The Japan Bank for International Cooperation (JBIC) is providing US$198mn, with the remaining US$198mn co-financed by BNP Paribas (through its Tokyo branch and serving as ECA coordinator), Citi and HSBC.
Japan’s export credit agency (ECA) Nippon Export and Investment Insurance (Nexi) is providing insurance for the commercial bank portion of the loan, covering 100% of political risks and 95% of credit risks.
The financing has been arranged for special purpose companies established by Tokyo-headquartered Financial Partners Group, which will use the funds to purchase four 13,700 twenty-foot equivalent unit container vessels. The ships are being built by Japanese shipbuilders Nihon Shipyard and Imabari Shipbuilding, and will be leased to ONE upon delivery.
The deal marks the first time JBIC has financed vessel exports through a Japanese Operating Lease with Call Option (JOLCO), a structure that enables the lessee to eventually purchase the assets from the lessor.
The agreement will boost Japan’s shipbuilding sector and allow ONE, which is owned by three major Japanese shipping lines, to grow its existing fleet, JBIC says.
“This loan will support NSY and Imabari Shipbuilding, two of Japan’s leading shipbuilders, in receiving orders for large container ships that feature concept designs for the future conversion tonext-generation fuels such as methanol and ammonia, as well as for the future installation of CO2 capture devices,” it says.
The agency adds: “In addition, Japanese shipyards procure over 90% of their equipment and materials domestically and they also contribute significantly toward creating jobs and supporting the economies of the regions.”
ONE was established in 2017 and is owned by three major Japanese shipping lines: Nippon Yusen, Mitsui O.S.K. Lines, and Kawasaki Kisen.
ECAs are developing innovative techniques to boost their domestic shipping industries. Last week, global commodities trader Trafigura struck a US$200mn deal with the Korea Trade Insurance Corporation (K-Sure) to help grow South Korea’s shipping sector.
As part of the deal, the trader committed to growing its usage of Korean shipping companies, K-Sure said.
