Global Ship Lease (GSL) has secured $1 billion in financing to expand its new shipbuilding program. This financing, provided as a syndicated loan, will be available in stages over seven years with an interest margin only 1.5 percent above the SOFR rate.
Details of the Financing and Shipbuilding Program
GSL has announced that this financing will be gradually drawn down as it completes 15 new contracted ships between 2028 and 2030. All 15 ships are expected to engage in long-term charter work, allowing GSL to align the financing with the commencement of its contractual revenues.
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The financing has been met with strong interest from banks, with eight banks participating in the process, led by Bank of America as the bookrunner, lead arranger, and security agent. Tsoukalas Pasaropoulos, CFO of GSL, emphasized that this financing agreement was secured with a margin 550 basis points lower than what was available five years ago.
Return to the Shipbuilding Market
This financing comes after GSL's return to the shipbuilding market earlier this year. In June, the company entered this sector by purchasing 10 medium-sized container ships valued at approximately $917 million, and then added five more ships worth $413 million.
The initial plan to build 15 ships involves a total investment of about $1.33 billion, and the ships will operate under charter contracts for an average duration of 7.1 years. Earlier this month, GSL exercised its options to purchase two additional ships valued at approximately $163 million, increasing the total number of ships to 17 and bringing the total investment in new shipbuilding to about $1.49 billion. Unlike the initial 15 ships, these two new vessels have not yet been chartered.
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