KBRA Affirms Ratings for Atlas Corp. and Seaspan Corporation

KBRA affirms the BB+ issuer rating of Atlas Corp. (Atlas, or the “company”), a global asset management company based in Vancouver, BC, for which the main portfolio company is Seaspan Corporation (Seaspan), the leading independent owner and operator of containerships globally. KBRA also affirms Seaspan's BB+ issuer and senior unsecured debt ratings as well as the senior secured debt rating of BBB. The rating Outlook is Stable.

Key Credit Considerations

Atlas’ issuer rating is primarily driven by the issuer rating of Seaspan, Atlas’ largest wholly owned operating subsidiary, which accounts for the significant majority of Atlas’ consolidated business, balance sheet and earnings, representing 99% of Atlas’ consolidated adjusted EBITDA for the trailing twelve months ended March 31, 2025 (1Q25). Therefore, given the absence of material debt obligations at the Atlas holding company level, Atlas’ rating is closely tied to the issuer rating of Seaspan. The ratings are supported by the solid operating history of Seaspan, its leading market position in the global containership leasing industry with 16% of the global operating fleet (on a TEU basis) as of 1Q25, an experienced management team and diverse fleet of high-quality vessels on long-term charters, in addition to the company’s moderate leverage, diverse funding sources, solid liquidity profile and significant unencumbered assets.

As of July 2025, Seaspan had 225 vessels in its pro-forma fleet, including 183 delivered vessels and 42 vessels on order, all with long-term charters contracted with an average remaining lease period of 10 years. Seaspan’s customer base is diversified across the largest container liners, albeit with some customer concentration inherent in the consolidated liner industry. A significant contracted revenue base to leading liner counterparties ($31.4 billion gross contracted cash flows) provides revenue stability which helps to mitigate the historical cyclicality of the shipping industry. The ratings are also supported by Seaspan’s consistent operating performance and solid financial metrics through various market cycles and disruptions. Earnings stability has been supported by the company’s strong and stable vessel utilization rates, which have averaged 99% since 2005.

The company’s liquidity profile is supported by strong operating cash flow, available credit lines, and access to the capital markets. As of 1Q25, Atlas had $1.9 billion of available liquidity ($1.2 billion cash and $700 million undrawn credit facilities), excluding $1.6 billion of committed undrawn financing for newbuild vessels. In addition, Seaspan had 47 unencumbered vessels with a net book value (NBV) of $2.4 billion as of 1Q25, which provides a potential source of additional liquidity.

Leverage (at both Atlas and Seaspan) on a debt-to-equity basis remained moderate and was approximately 2x as of 1Q25, slightly above the company’s target level (50%-60% debt-to-total assets) which equates to approximately 1.5x debt-to-equity at the high end of the range, due to increased borrowing to fund newbuild vessel deliveries.

The ratings are constrained by the inherent high customer concentration in leading liner companies, growth in the global fleet orderbook which presents potential future recharter risk, a funding profile predominately comprised of secured borrowing and exposure to disruptions from trade policy, and the cyclical nature of the shipping industry.

The ratings of Seaspan’s secured debt facilities are two notches above Seaspan’s issuer rating, reflecting strong collateral security with a diversified and in-demand 43-vessel portfolio (as of June 2025) which is considered strategically important to Seaspan’s operations and a moderate LTV. The vessel collateral appraised market value was $3.4 billion as of June 2025 (58% LTV on the outstanding facilities amount).

The senior unsecured debt rating is aligned with the issuer rating which reflects Seaspan’s significant amount of unencumbered assets of $2.4 billion on a NBV basis as of 1Q25, providing solid coverage of 3.1x over its $750 million unsecured debt obligations.

Rating Sensitivities

The rating Outlook is Stable; therefore, a rating upgrade in the near future is not expected. Atlas’ issuer rating, in the absence of material debt at the Atlas holding company level, is closely tied to the issuer rating of Seaspan, which represents most of Atlas’ consolidated balance sheet and earnings. If Seaspan continues to demonstrate earnings stability over time, maintains lower leverage within its targeted range, further diversifies its funding including a higher proportion of unsecured debt, and significantly increases unencumbered assets, this could lead to consideration of a rating upgrade.

A sustained downturn in global trade which leads to financial stress of a large charter customer without explicit government backing, a decline in vessel utilization or charter rates, or a decline in funding availability, such that earnings, leverage, or liquidity metrics materially deteriorate, could lead to a downgrade. Changes in financial policies at the Atlas holding company level such that capital or liquidity positions are impacted, could also lead to negative rating pressure for both Atlas and Seaspan. KBRA notes that a future potential rating on debt issuance at the Atlas holding company level could be notched lower than the issuer rating depending on structural subordination and mitigants. A decline in the proportion of Atlas’ consolidated business represented by Seaspan could also negatively impact Atlas’ rating.

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