Global Ship Lease, Inc. (NYSE:GSL) (the “Company”, “Global Ship Lease” or “GSL”), an owner of containerships, announced its unaudited results for the three months and year ended December 31, 2021.

Full Year 2021 and Year To Date Highlights

Reported operating revenue of $153.5 million for the fourth quarter 2021. Operating revenue for the year ended December 31, 2021 was $448.0 million.

Reported net income available to common shareholders and normalized net income of $66.1 million for the fourth quarter 2021.

For the year ended December 31, 2021, net income available to common shareholders was $163.2 million, after $5.8

million premium paid on the full optional redemption of the outstanding 9.875% Senior Secured Notes due 2022 (“2022 Notes”) on January 20, 2021, associated non-cash write offs of deferred financing charges of $3.7 million and of original issue discount of $1.1 million, a non-cash charge of $1.3 million for accelerated stock based compensation expense, prepayment fees of $3.2 million on three credit facilities and a $7.8 million net gain from the sale of La Tour. Normalized net income for the year ended December 31, 2021 was $170.7 million.

Generated $85.4 million of Adjusted EBITDA for the fourth quarter 2021. Adjusted EBITDA for the year ended December 31, 2021 was $252.2 million.

Earnings per share and Normalized earnings per share for the fourth quarter of 2021 was $1.84. Earnings per share for the year ended December 31, 2021 was $4.65. Normalized earnings per share for the year ended December 31, 2021 was $4.86.

Declared a dividend of $0.25 per Class A common share for the fourth quarter of 2021 to be paid on March 4, 2022 to common shareholders of record as of February 22, 2022.

Paid dividends of $0.25 per Class A common share for the first, second and third quarters 2021.

Announced that from first quarter of 2022 the dividend will increase by 50% to $0.375 per Class A common share per quarter; $1.50 per share, annualized.

Authorized $40.0 million for share repurchases, to be utilized on an opportunistic basis.

During the fourth quarter 2021, raised $32,561 of net proceeds under the ATM program for the 8.75% Series B Preferred Shares (“Series B Preferred Shares”). Since the inception of this ATM program in December 2019, a total of $71.4 million net proceeds has been raised. During 2021, the average issue price under this ATM program was $25.38 per share, against par value of $25.00. As of December 31, 2021, there were 43,592 Series B Preferred Shares outstanding.

The total outstanding of Senior Unsecured Notes due 2024 (the “2024 Notes”) as at December 31, 2021 was $117.5 million, which includes the issuance in July 2021 of $35.0 million aggregate principal amount of the 2024 Notes to the sellers of the Borealis Fleet, as part of the consideration. Since the inception of the ATM program for the 2024 Notes in November 2019, a total of $50.9 million net proceeds has been raised. During 2021, the average issue price under the ATM program was $25.55, against par value of $25.00. There were no sales of the 2024 Notes under this ATM program in the third and fourth quarter of 2021.

In January 2021, fully drew down a new $236.2 million senior secured loan facility with Hayfin Capital Management, LLP (the “New Hayfin Facility”). The proceeds, together with cash on hand, were used to complete on January 20, 2021 the full optional redemption of our then outstanding 9.875% 2022 Notes.

In January 2021, closed a fully underwritten public offering of 5,400,000 Class A common shares, at a public offering price of $13.00 per share. The underwriters exercised, in part, their 30-day option to purchase in February 2021, an additional 141,959 Class A common shares. The aggregate net proceeds, after underwriting discounts and commissions and expenses, were approximately $67.5 million.

In April and May 2021, drew down in full two new $51.7 million secured credit facilities and a new $54.0 million sale and leaseback agreement maturing April 2026 and May 2028 respectively, to refinance the three existing tranches of the $180.5 million Deutsche, First Citizens & Trust Company, HCOB, Entrust, Blue Ocean Credit Facility that had a maturity date of June 30, 2022.

In August 2021, entered into a term loan facility of $12.0 million with Sinopac Capital International (HK) Limited maturing September 2026 to refinance the $8.125 million Hayfin Facility (the “GSL Valerie Facility”), which was the final facility maturing in 2022.

In December 2021, entered into a USD 1 month LIBOR interest rate cap of 0.75% through fourth quarter 2026 on $484.1 million of floating rate debt, which reduces over time and represented approximately half of the outstanding floating rate debt.

In January 2022, agreed an amendment to the existing $268.0 million Syndicated Senior Secured Credit Facility (CACIB, ABN, CIT, Siemens, CTBC, Bank Sinopac, Palatine) with outstanding balance of $213.2 million, to extend the maturity date from September 2024 to December 2026, favorably amend certain covenants, and release three vessels from the facility’s collateral basket, at an unchanged rate of LIBOR + 3.00%. These three vessels were subsequently used as collateral for a new $60.0 million syndicated senior secured debt facility, maturing July 2026 and priced at LIBOR + 2.75%, which was used to fully repay the 10.00% Blue Ocean junior debt facility and for general corporate purposes. There are now no material debt maturities before May 2024.

In February 2022, entered into a further USD 1 month LIBOR interest rate cap of 0.75% through fourth quarter 2026 on $507.9 million of floating rate debt, which reduces over time and represented the remaining balance of the outstanding floating rate debt, leaving the Company fully hedged.

On September 1, 2021, announced the purchase and retirement of 521,650 shares for $10.0 million.

In January 2021, Moody’s upgraded the Corporate Family Rating and the issue rating of the 2022 Notes to B2 / Positive from B3 / Positive. In July 2021, Moody’s further upgraded the Corporate Family Rating to B1 / Stable. In August 2021, S&P upgraded the Corporate Family Rating to BB- / Stable from B+ / Stable.

On February 9, 2021, announced the agreement to purchase from and charter back to Maersk Line, seven 6,000 TEU Post-Panamax containerships with an average age of approximately 20 years for an aggregate purchase price of $116.0 million funded by cash, a new $64.2 million secured credit facility and a new $14.7 million sale and leaseback agreement.

The vessels were delivered between April 26, 2021 through July 28, 2021.

On June 8, 2021, announced the agreement to purchase 12 containerships from Borealis Finance LLC (the “Borealis Fleet”), with an average size of approximately 3,000 TEU, a weighted average age of 11 years, and all with charters to leading liner operators, for an aggregate purchase price of $233.9 million funded by cash, an issuance of $35.0 million of existing 2024 Notes to the sellers of the ships and a new $140.0 million syndicated secured credit facility. All of these vessels were delivered in July 2021.

On June 16, 2021, announced the agreement to purchase four 5,470 TEU ultra-high reefer capacity Panamax containerships with an average age of approximately 11 years, and with charters to Maersk Line, for an aggregate purchase price of $148.0 million funded by cash and four new $30.0 million sale and leaseback agreements. Three of these vessels were delivered to us in September 2021 and the remaining vessel was delivered on October 13, 2021.

Between January 1, 2021 and March 1, 2022, including the charters on the 23 ships purchased during 2021, added 51 charters (including extensions), representing approximately $1.55 billion of contracted revenues and $1.17 billion of expected aggregate Adjusted EBITDA, calculated on the basis of the median firm periods of the respective charters. 26 charters were for 1,100 – 3,500 TEU feeder ships, nine were for 4,250 – 5,470 TEU Panamax ships, 14 were for 5,900 – 6,800 TEU Post-Panamaxes, and two were for ECO-9,115 TEU wide-beam vessels. Charter durations ranged from approximately 21 months to approximately five years, with shorter durations for the smaller ships and longer durations for the larger ships. Rates were up materially against those previously contracted.

George Youroukos, Executive Chairman of Global Ship Lease, stated, “First and foremost, we must acknowledge the dreadful situation in Ukraine and extend our sympathies to all those affected, including the many seafarers who are so concerned about their families. We are doing all that we can to support them. The conflict introduces significant uncertainty into the course of economic recovery and additional complexity into supply chains throughout the region. That said, throughout 2021 and continuing into what is normally a seasonally weak period in the new year, the combination of consistently strong demand and limited vessel supply has driven the containership charter market to levels not seen in well over a decade. Facing robust demand for the transportation of containerized freight, both structural and pandemic-related congestion and supply chain issues that further tighten the market, and the real prospect of finding themselves short of vessel capacity, our liner company customers have sought ever-longer charter durations at increasingly attractive rates. GSL’s high-quality fleet of mid-sized and smaller containerships has put us in a very strong position to benefit from this environment, securing numerous charters at durations and rates that are multiples of what would have been available 12-18 months ago, and unthinkable in years past. In this environment, GSL has entered a virtuous cycle of improved long-term charter revenues, reduced cost of debt, selective growth on an immediately accretive basis, and substantial returns of capital to shareholders in the form of both opportunistic share buybacks and a sustainable dividend that will soon be more than triple the level announced in early 2021.”

“Moving forward, supply and demand fundamentals in the containership sector look set to remain positive through at least the medium term, with congestion expected to be a continuing feature and large retail inventory restocking needs representing a substantial incremental contributor to overall demand. Despite a continuing recovery in global economic activity, with positive implications for containerized trade flows, a limited number of new vessels in our mid-sized and smaller classes are scheduled to be delivered in the next couple of years. The combination of rising newbuild costs, a distant delivery window due to a lack of shipyard capacity, and continued uncertainty about long-term environmental regulations and propulsion technology are discouraging the speculative ordering that was a prominent feature of earlier containership market upcycles. Meanwhile, the imperative to pursue decarbonization is expected to drive cooperation between liner operators and containership owners to enhance existing ships to meet the evolving demands of both regulators and end consumers, which is expected to result in a material reduction in vessel speeds and thus in effective fleet supply. In the quarters and years ahead, and in collaboration with our customers, we expect to deploy proven technologies and solutions to improve vessel efficiency and reduce our carbon footprint accordingly. Against this highly supportive backdrop, and by continuing to execute our prudent chartering strategy and deploying capital on a highly disciplined basis, GSL remains well positioned to further improve our balance sheet, expand our contracted cash flow and fleet through selective acquisitions, reliably sustain our dividend, opportunistically utilize our new $40.0 million share repurchase authorization to return a substantial proportion of our available cashflow to shareholders, and create lasting value for shareholders throughout the cycle.”

Ian Webber, Chief Executive Officer of Global Ship Lease, commented, “The addition of more than $1.5 billion of contracted revenues and the expansion of our fleet by more than 50% since the beginning of 2021 – contributing significantly to a more than doubling of adjusted EBITDA from fourth quarter 2020 to fourth quarter 2021 - have put GSL in a position to materially improve our financial performance in ways that will benefit the Company on a sustained basis for years to come. As credit ratings across the liner industry have increasingly reflected the dramatically improved financial condition of our counterparties, we have been able to refinance over $400.0 million of debt, reduce our cost of debt from 6.3% to 4.7%, and hedge all of our floating rate debt, all reflected in our repeated credit rating upgrades. With no debt maturities until mid-2024 and a high degree of visibility on our revenues in the years ahead, we intend to continue pursuing opportunities to eliminate relatively higher cost debt and maintaining a prudent, non-speculative debt structure in which our amortization schedule is well matched by contracted cash flows. From this strong foundation, we believe that we can sustainably support not only the ongoing capital needs of our business, but also our disciplined growth strategy and a substantial return of capital to our shareholders.”