CoolCo secures sale and leaseback financing for two newbuild LNG carriers
CoolCo secures sale and leaseback financing for two newbuild LNG carriers - Offshore Energy
CoolCo secures sale and leaseback financing for two newbuild LNG carriers
Cool Company (CoolCo) has entered into sale and leaseback financing arrangements with Huaxia Financial Leasing for two LNG carriers that are being built by Hyundai Samho Heavy Industries in South Korea.
Following the earlier announcement of the purchase of two 2-stroke LNG carrier newbuilds, namely Kool Tiger and Kool Panther, CoolCo has now fully financed the two vessels with this sale and leaseback.
The arrangements are on a fixed rate per day basis for ten years, with an implied interest rate just under 6% and a minimum loan-to-value of 80%, with potential for additional capacity contingent upon the terms of the charter employment that CoolCo anticipates securing in advance of the vessels’ deliveries.
Scheduled for delivery in September and December of 2024, the newbuilds will have a cargo capacity of 174,000 cubic meters, a GTT Mark III Flex Membrane cargo tank system, reliquefaction, air lubrication, and shaft generators.
On October 10, 2023, construction of Kool Panther began at Hyundai Samho Heavy Industries shipyard, marked by the steel cutting ceremony.
Commenting on the sale and leaseback arrangements, John Boots, CFO of CoolCo, said: “We are pleased to have established this important relationship with Huaxia Financial Leasing and look forward to working closely with them over the long term. Having completed the financing of these two state-of-the-art, 2-stroke MEGA LNG Carrier newbuilds, this materially strengthens CoolCo’s future cashflow potential and strategic capabilities in a non-dilutive manner that clearly benefits our shareholders.”
Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.