S&P Global Ratings upgrades Seaspan to BB, citing improved profitability, fleet expansion, and strong cash flow projections.
S&P Global Ratings has upgraded Seaspan's credit rating from BB- to BB, attributing the improvement to enhanced profitability and scale, as reported by S&P Global.
The upgrade also extends to Seaspan's unsecured notes due in 2029, which have been raised to BB from BB-, with the recovery rating revised from 4 to 3. The outlook remains stable, with adjusted funds from operations to debt expected to stay above 12 percent.
As the world's largest independent containership lessor, Seaspan has expanded its fleet by 40-45 percent since 2021, now comprising 182 vessels and boosting TEU capacity by 75-80 percent to 1.9 million. Adjusted EBITDA has surged over 50 percent to US$1.8 billion in 2024, while return on capital has improved to nearly 10 percent.
The company has consistently maintained EBITDA margins of 75-80 percent for nearly a decade, despite fluctuations in freight markets. Its earnings significantly surpass those of peers such as Danaos, Navios Maritime Partners, and Global Ship Lease, highlighting a stronger business risk profile.
Seaspan's cash flow has also strengthened, with adjusted FFO to debt projected at just over 14 percent by mid-2025. Positive free operating cash flow of $350-400 million is anticipated for 2025 and 2026, although debt-funded newbuilds may exert pressure on credit measures in 2027-2028.
Long-term fixed-rate charters with major liners provide stability, with contracted cash flow estimated at around $31 billion and utilization near 99 percent. Seaspan's fleet, averaging seven years in age, accounts for 16 percent of global leased containership capacity, with most vessels exceeding 10,000 TEU.
