Greece-based Paragon Shipping (PRGN) has signed a $69m loan agreement with China Development Bank (CDB Credit Facility) to part-fund a pair of under construction containerships.
The two vessels having 4,800teu capacity each are currently being built by China’s Zhejiang Ouhua Shipbuilding and are expected to be delivered in the second quarter of 2014.
Both the vessels will be certified by two classification societies including Germanischer Lloyd and the China Classification Society.
Paragon has also granted an option to its subsidiary Box Ships to acquire the vessels at any time before their delivery to the Greek shipping firm.
According to Paragon, the CDB Credit Facility is available for drawdown following the delivery of the vessels subject to certain contingencies and conditions.
The loan, which has a maturity period of ten years, will be used to finance less than 60% of the construction cost of the vessels, or 80% of the vessels’ market value during the time of delivery.
As per the deal, amounts borrowed will bear interest at London Interbank Offered Rate (Libor), plus a margin of 4%.
Additionally, the loan can be freely transferred to Box Ships if it decides to exercise its option to purchase the newbuilds before their delivery.
The company has also signed an agreement with the syndicate of lenders led by Nordea Bank Finland (Nordea).
Paragon Shipping specialises in the transportation of drybulk cargoes and currently has a fleet of 13 drybulk vessels with a total carrying capacity of 816,472dwt.
Image: A China Development Bank loan will help Paragon Shipping in part-funding two containerships being built by China’s Zhejiang Ouhua Shipbuilding. Photo: Baycrest.