Posted on: 7 February 2025
Watson Farley & Williams (“WFW”) and Hogan Lovells jointly advised on three separate green ship financing transactions with an aggregate value of US$1.5bn+. All three transactions, one of which was secured by Chinese ECA Sinosure, were carried out in accordance with the Green Loan Principles of the Loan Market Association. WFW advised arrangers, financing banks and green loan arranger, with Hogan Lovells acting for Hapag-Lloyd.
In October 2024, Hapag-Lloyd signed two orders for a total of 24 container ships with two Chinese shipyards. Twelve ships with a capacity of 16,800 TEU will be built by the Yangzijiang Shipbuilding Group, which will be used for capacity expansions to existing services. A further twelve vessels with a capacity of 9,200 TEU have been ordered from New Times Shipbuilding Company Ltd. and will replace older units in Hapag-Lloyd’s fleet that are approaching the end of their service life this decade.
The three green ship financings comprise:
- a US$1.1bn green term loan, backed by Sinosure, to finance the construction of six of the twelve 16,800 TEU and two of the twelve 9,200 TEU newbuilding container vessels. HSBC Continental Europe acted as ECA coordinator, green loan arranger and arranger for a syndicate of banks consisting of BNP Paribas, BNP Paribas Fortis, Citibank, Crédit Agricole CIB, DZ Bank, ING Bank and SMBC;
- a US$280.8m bilateral green term loan to finance the construction of three of the twelve 9,200 TEU newbuild vessels with KfW IPEX-Bank as the financing bank; and
- a US$201m bilateral green term loan to finance the construction of two of the twelve 9,200 TEU newbuild vessels with Bank of America Europe Designated Activity Company as the financing bank.
The cross-border WFW Assets & Structured Finance team that advised the arrangers and financing banks was led by London Assets Partner Maren Brandes.
The Hogan Lovells Frankfurt Corporate & Finance team advising Hapag-Lloyd was led by Frankfurt Partner Bianca Engelmann.
Maren commented: “We are delighted to have advised KfW IPEX-Bank and Bank of America on these ground-breaking green loans which will drive the conversion of Hapag-Lloyd’s fleet to environmentally friendly technology and demonstrate a real commitment by the shipping industry to reduce global carbon emissions. They opted for WFW to advise on them on these big-ticket, strategic transactions thanks to our maritime practice’s world-leading reputation as well as our extensive previous experience in advising on ECA-backed transactions for Hapag-Lloyd”.
Bianca added: “These landmark investments, among the largest in Hapag-Lloyd’s recent history, underline its commitment to continued growing whilst also modernising its fleet in terms of ship size and sustainability. We are delighted to have once again advised Hapag-Lloyd on their green ship financings, bringing to bear our deep understanding of their business and financing needs as well as of the green financing markets”.
