Seaspan Corporation announced it has forward fixed contracts for 10 containerships with a "major liner customer", bringing the company's total 2021 forward fixtures to 58 vessels, or approximately 50% of its time chartered fleet.
The vessels, representing approximately 100,000 TEU in aggregate, were previously scheduled to have four charters expire in 2022, four charters expire in 2023, and two charters expire in 2024, Seaspan said. All 10 vessels have now been fixed through new five-year charter agreements, beginning at the end of their current charter periods.
According to Seaspan, a wholly owned subsidiary of Atlas Corp., the forward fixed charters will generate approximately $670 million of additional gross contracted cash flow. The charters have a fixed rate for the first three years and the remaining term is based on a market rate within a certain floor and ceiling. The calculation is based on the minimum term of the charter and the floor rate for the period subject to market rates.
Bing Chen, Seaspan chairman, president and CEO, said, "We continue to leverage our differentiated business model to provide creative customer solutions by forward fixing operating vessels and building new vessels. Seaspan now has no fleet roll-offs in 2021, and a limited number in 2022, 2023 and 2024, which insulates us from future market volatility while continuing to grow long-term quality cash flow through all market cycles."
Chen added, "Seaspan continues to strengthen its differentiated business model by committing material future capacity in the current market. This mutually beneficial approach, built upon our long-term commitment and creative partnerships, facilitates our strategic customers' success, contributes to market stabilization and solidifies our market leadership position."