United Arab Shipping Company $162 million Enhanced Maritime Trust Certificates (EMTC) issue

Overview:

• United Arab Shipping Company (UASC) has issued $162 million in Enhanced Maritime Trust Certificates (EMTC).
• The EMTCs were issued by a US trust via a private placement Reg S issue with the proceeds used to finance two new container vessels registered in Malta.
• Deutsche Bank and Citigroup acted as joint bookrunners.
• EMTCs are based on the existing Equipment Trust Certificate (ETC) system, trust certificates are sold to investors with the funds raised used to finance the purchase of an asset (e.g. a container ship) by a trust managed for the investors. The trust leases the asset with investors receiving payments through the trust.
• An 'Enhanced' issue has different classes of securities in the issue.
• The deal represents the first time the ETC structure has been adapted for use in the shipping industry.
• The deal comes in the context of a proposed merger between UASC and Hapag-Lloyd.

Sam Duke - Editor