Seaspan’s $175m 3.75% exchangeable senior notes priced

© Sergey Khakimullin

PRESS RELEASE

LONDON, Dec. 17, 2020 /PRNewswire/ – Atlas Corp. (“Atlas”) (NYSE: ATCO) announced that its wholly-owned subsidiary, Seaspan Corporation (“Seaspan”), priced an offering (the “Offering”) of $175.0 million aggregate principal amount of 3.75% exchangeable senior notes due 2025 in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).

Seaspan also granted the initial purchasers of the notes an option to purchase up to an additional $26.25 million aggregate principal amount of notes. The sale of the notes is expected to close on December 21, 2020, subject to customary closing conditions.

The notes will be exchangeable under certain circumstances at the option of the holders into Atlas common shares, par value $0.01 per share (“Atlas shares”), cash, or a combination of Atlas shares and cash, at Seaspan’s election, unless the notes have been previously repurchased or redeemed by Seaspan.

The exchange rate will initially equal 76.8935 Atlas shares per $1,000 principal amount of notes (equivalent to an initial exchange price of approximately $13.01 per Atlas share). The exchange rate will be subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest.

After giving effect to the cap price established in the capped call transactions described in more detail below entered into by Seaspan concurrently with the pricing of the notes, the initial effective exchange price on the notes of $17.85 per Atlas share will represent a premium of approximately 75% over the last reported sale price of the Atlas shares of $10.20 per share on the New York Stock Exchange on December 16, 2020.

The notes will be Seaspan’s senior unsecured obligations and will accrue interest payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2021, at a rate of 3.75% per year. The notes will not be guaranteed by Atlas or any of its or Seaspan’s respective subsidiaries. The notes will mature on December 15, 2025, unless earlier exchanged, repurchased or redeemed. The effective interest cost to the company over the term of the notes, after giving effect to the net cost of the capped call transactions described below, will be approximately 5.5% per year.

Seaspan may redeem the notes, at its option, in whole or in part, on any business day on or after December 20, 2023 and prior to September 15, 2025, if the last reported sale price of Atlas shares has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending within three trading days immediately preceding the date on which Seaspan provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

To read the full release, please click here.