In addition to breaking boundaries with state-of-the-art technology, SBM Offshore has taken pioneering steps in the financing of FPSOs.

SBM Offshore was the recipient of the IJGlobal Latin American Upstream Oil & Gas Deal of the Year 2014 for the finance deal for FPSO Cidade de Maricá.

(March 16th 2015)

IJGlobal’s Deal of the Year Awards Dinner

IJGlobal’s Deal of the Year Awards Dinner


New project financing agreements totaling US$1.9 billion were put in place in 2014. This included project financing for FPSO Cidade de Maricá totalling US$1.45 billion from a consortium of 16 international banks, ensuring the continued construction of the high capacity vessel destined for offshore Brazil by the end of 2015. Adding to the list of past successful deals, these most recent agreements illustrate SBM’s leadership in project financing and contribute to our investors and stakeholders confidence in the financial stability of the company.

The road to completing the deal was the result of much preparation and a sucessful track record over many years introducing banks to the concept of investing in FPSOs. The groundwork by the SBM finance team paid off, gaining the confidence of the banks and convincing them of the appeal and potential profitability of such financing.

The interim step was a US$1.0 billion framework agreement between the Export-Import Bank of China (CEXIM), Dutch Bank ING and SBM Offshore, which was signed in March 2014. The presence of the President of China, Xi Jinping, underlined the importance of this agreement, which is leading the way for the financing of future FPSOs by the Beijing-headquartered bank. CEXIM comprises the largest part (US$150 million) of the total funding allocation of US$1.45 billion for Maricá. Interest among banks was so high that it was 30% over-subscribed.

The cooperation between the three parties for the framework agreement opens the door to more opportunities on the FPSO construction front in China, with CEXIM open to committing up to one billion US dollars over the next three years. The framework was a direct follow-on from SBM Offshore’s decision to engage the Chinese yard in Guangzhou to convert and refurbish three of its FPSOs – one of which is now operating offshore Brazil.

Later on during the Year, SBM completed its second US Private Placement (USPP) financing with the Deep Panuke project for US$450 million. The positioning of SBM Offshore in the Debt Capital Market is driven by the strategy of the company to diversify its sources of financing.

This new and innovative move into such financial solutions for the offshore services industry is one that strengthens SBM’s financial position going forward and provides an assurance to our oil and gas clients that we have the ability to finance and the access to funding for any FPSO project that they wish to develop. This clearly gives SBM a competitive advantage, considering the struggle that the industry in general is currently facing.

DEEP PANUKE PRODUCTION FIELD CENTRE OFFSHORE CANADA

 

Completion of US$450 million of non-recourse senior secured debt by way of a US Private Placement (US/Canadian Debt Capital market). This is SBM’s second time to successfully utilise this type of financing. The 3.5% fixed coupon bond is rated BBB- / BBB (low) by Fitch and DBRS respectively and carries a seven-year maturity. The additional liquidity and greater financial flexibility have further improved SBM Offshore’s ability for securing funding for future projects. The investors’ profile for the project bond mainly includes retirement funds and insurance companies – 14 in total.


 

FPSO CIDADE DE MARICÁ FINANCE DEAL

The largest-ever FPSO financing was completed in July 2014. Two points that differentiate this finance deal from previous ones by SBM is that it is the largest and has the longest duration since part of the transaction has a maturity of 14 years post completion (ie: tenor of 16 years door-to-door), which demonstrates the confidence that the banks have in the long- term return on investment that the FPSO represents.

The project finance deal signed by SBM Offshore and its partners in the FPSO – Mitsubishi, Nippon Yusen Kaisha and QGOG Constellation – is at a weighted average cost of debt of 5.02%.

 

CdM Overview week 42

CORPORATE FINANCING CAPABILITY

SBM Offshore has also secured a 5+1+1 years tenor corporate Revolving Credit Facility of US$1 billion in December 2014 including an accordion option of US$250 million for the financing, purchase, conversion, construction or upgrade of FPSOs. In addition to Project financing facilities, the company has an excellent track record for setting up corporate Bridge Loan facilities. SBM Offshore has successfully secured more than US$1 billion over the last two years in corporate Bridge Loan facilities.

 

In February 2014, SBM Offshore accepted an award from Project Finance International (PFI) for the ‘2013 African Oil & Gas Deal of the Year’ for its N’Goma FPSO, which is operating since November 2014 offshore Angola. The prestigious accolade recognised the success of the financing deal – the biggest ever seen for an Angolan FPSO, which was achieved despite the complex nature in terms of location, multiple stakeholders and timeframe. With less than three months between Request for Proposal (RFP) and Financial Close in July 2013, the US$600 million of debt on an 8.5 year tenor supported an Angolan oil field, Angolan shipyard and an Angolan operator. The project company behind N’Goma is Sonasing -a consortium comprising SBM Holding (50%), Sonangol (30%) and Angola Offshore Services (20%).