8% Yield With Interest Rate Protection, No K-1

Note: This report is a continuation of our public series highlighting recent preferred shipping equity offerings and opportunities. Our previous iteration covered Tsakos Energy Navigation Series-F, which offered a record 9.5% yield (TNP-F).
Company Overview Seaspan Corp (SSW) is the world’s largest containership leasing company, with a fully-delivered fleet of 112 vessels ranging between 2,500 TEU and 14,000 TEU. SSW charters their ships to multiple top-tier shipping lines, but the bulk of their long-term exposure is with Asian firms including China’s COSCO, Taiwan’s Yang Ming, and Japan’s MOL and K-Line. During the past year, SSW has attracted a major investment from Fairfax (i.e. Prem Watsa) and they have also executed a major expansion by rolling up the related-party GCI venture.
SSW's closest peers are Costamare (CMRE), Danaos Corp (DAC), and Global Ship Lease (GSL). Both CMRE and GSL also offer preferred equity.
SSW currently trades at $8.07 with a pro forma share count of approximately 212M, for a forward market capitalization of over $1.7B. SSW also has 25M additional outstanding warrants with an $8.04 exercise price. SSW offers a current yield of 5.5%.
Series-I Overview Although Seaspan has significantly increased their common share capital via warrants with Fairfax, they have recently pivoted back to the preferred equity markets, raising $150M via Series-I Preferred Equity (SSW-I) at 8%.
Why is SSW selling more preferred... Read more