BMO Financial Group, acting as lead sustainability structuring coordinator in a syndicate of Canadian, U.S. and European banks, has announced a financing deal with Hong Kong-based containership owner and operator Seaspan.
An amendment to an existing credit facility, the deal introduces a margin adjustment incentive mechanism tied to the alignment of the carbon intensity of Seaspan’s vessels with the International Maritime Organization’s 2050 decarbonization trajectory .
The deal also incorporates sustainability-linked provisions into charter contracts, creating a value chain approach to decarbonization.
“Seaspan has … been designing and building vessels with … fuel efficiency for over ten years. This innovative SLL structure created in partnership with BMO allows Seaspan to go beyond technology. We have set ambitious targets aimed at aligning our environmental performance with our financial objectives as well as those of our customers, creating a true supply chain approach to decarbonization,” Matt Borys , Head of Capital Markets & Treasurer of Seaspan commented.
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Construction of Seaspan’s ten LNG “green” boxships begins Vessels “Helping clients like Seaspan reach their ESG goals is an important way BMO is Boldly Growing the Good in business and life, and a great example of the progress our clients across industries can make as we work together to build a more sustainable future,” Jonathan Hackett , Head, Sustainable Finance, BMO Capital Markets, said.
Sustainability-linked revolving credit facility
The sustainability-linked 3-Year, $250 million revolving credit facility includes terms that reduce or increase the borrowing costs as targets related to carbon intensity of vessels and sustainability-linked contracts with charterers are met or missed.
BMO Capital Markets and Citigroup Global Markets are mandated lead arrangers and bookrunners, with BMO Capital Markets acting as co-sustainability coordinator.
Carbon neutral in its own operations since 2010, BMO announced its climate ambition in March 2021 with a commitment to deploy $300 billion in sustainable lending and underwriting to companies pursuing sustainable outcomes by 2025.
BMO is its clients’ partner in their transition to a net-zero world and, since December 2019, has completed green and sustainability-linked loans for companies in a range of sectors.
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