Watson Farley & Williams (“WFW”) advised Navigator Holdings Ltd (NYSE: NVGS) (“Navigator”) on the closing of a US$205.8m financing arrangement for two newbuild gas carriers.
The financing comprises a secured pre-delivery bridge facility which will transition into a long-term Japanese Operating Lease with Call Option (“JOLCO”) sale and leaseback arrangement, marking Navigator’s first financing using this structure. The vessels are being constructed by Jiangnan Shipyard (Group) Co., Ltd. and China Shipbuilding Trading Co., Ltd., with delivery expected in 2027.
The bridge facility, provided by BNP Paribas through its Tokyo Branch, will make available up to US$164.64m to finance up to 80% of the pre-delivery instalments payable to the shipyard. On delivery, the bridge facility will be refinanced through the JOLCO arrangement, under which US$205.8m will be made available to fund the full purchase price of the vessels.
Under the JOLCO structure, Japanese special purpose companies will act as owners of the vessels, which will be chartered on a long-term bareboat basis to Navigator subsidiaries. The acquisition of the vessels will be funded through a combination of senior debt from third-party lenders and equity contributions from Japanese investors, with Navigator retaining responsibility for their commercial and technical operation.
Navigator is the owner and operator of the world’s largest fleet of handysize liquefied gas carriers and a global leader in the seaborne transportation of liquefied and petrochemical gases.
For more information, Navigator’s press release can be found here.
The cross-border WFW Maritime team that advised Navigator was led by Dubai Assets and Structured Finance Partner Emily Widdrington, assisted by Senior Associate Elizabeth Ilett. London Partner Richard Stephens advised on tax matters, with Singapore Partner Lizzie Roe providing assistance on certain JOLCO aspects.
Emily commented: “We are delighted to have supported our long-standing client Navigator on the successful closing of this significant financing, marking the introduction of a JOLCO structure to diversify its financing strategy. This transaction demonstrates Navigator’s ability to access innovative and cost-effective financing solutions to support its fleet development and commercial objectives, as well as WFW’s deep sector expertise and experience advising on complex cross-border leasing and structured finance transactions”.
