FPSO Cidade de Paratay Contracted and Financing Arranged

Last week, a joint venture comprised of SBM Offshore N.V., Queiroz Galvao Oleo e Gas S.A. (“QGOG”), Nippon Yusen Kabushiki Kaisha (“NYK”) and ITOCHU Corporation announced that it, together with QGOG, had entered into 20-year charter and operating agreements with BM-S-11 Consortium, owned 65% by Petrobras SA (Operator), 25% by BG Group, and 10% by Petrogal Brasil Ltda, for the operation of the FPSO Cidade de Paratay on the Lula Nordeste field. This field is located in block BM-S-11 in the Santos basin in the pre-salt area offshore Brazil in water depths of 2,100 meters.

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CMA CGM Replicates Hapag-Lloyd Bond Model

Last week, CMA CGM S.A. successfully offered through a private placement, a $909 million equivalent dual tranche senior note issue, which, in many respects, closely resembled structurally last year’s Hapag-Lloyd bond issue led by Deutsche Bank. The offering consisted of a $475 million 8.5% tranche due in 2017 and a EUR 325 million 8.875% tranche due in 2019. Proceeds of the offering will be used to refinance the company’s existing Euro and Dollar denominated bonds and for general corporate purposes. Key terms are shown below in the Guts of the Deal.

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MISC’s Unit Clinches USD 137 million

Malaysia Vietnam Offshore Terminal (“MVOT”), a 51% jointly controlled entity of MISC, signed a USD 137 million limited recourse term loan facility from a syndicate of banks comprising Sumitomo Mitsui Banking Corporation, HSBC, Natixis and OCBC Bank (Labuan). PetroVietnam Technical Services Corporation (“PTSC”), a member of the Vietnam National Oil and Gas Group (“PetroVietnam”) owns the remaining 49% in MVOT.

The floating storage and offloading unit (“FSO”) owner will be making use of the seven year loan to finance project costs. Both MISC and PTSC will provide guarantees to the loan in proportion to their shareholding interests in MVOT via a pledge of the shares held by both companies.

Bank Debt Returns to Normalcy?

One of the major concerns on the minds of many would be the pile of toxic collateralized mortgage paper that remains on banks’ balance sheets and this will continue to restrict the banks’ ability to extend new credit. Likewise, shipping banks face the same tricky task of valuing the shipping assets on their books based on current market prices. Basel II requires banks to set aside more capital to riskier assets whenever the security cover reduces, and this could potentially limit capital for lending. The process of writing down book values has yet taken place and moving forward, it is absolutely crucial that bank losses on shipping remain limited or the industry could risk losing a number of lenders. There has already been a material contraction in ship lending capacity among major shipping banks.

2009 has been a busy year for the ship financiers, not so much for lending but more in terms of restructuring and workouts. Lending terms as one would expect have become more stringent in 2009 and not only has the advance rate been lowered to 50-60%, banks prefer shorter tenors between 3 and 5 years. This is in stark contrast to the 10 to 12 year tenors banks were offering shipowners during the shipping boom just a couple of years back. Bankers call this a return to basics. Continue Reading

A Noble Breed

Last week, our sister publication Freshly Minted reported on Maersk’s successful EUR 750 million (USD 1.3 billion) five-year bond. This was the shipping conglomerate’s first bond issuance, following a recent equity offering of USD 1.7 billion. In Asia, commodity trading house Noble Group has likewise found tremendous success in raising funds, suggesting that investors and bankers are getting warmed up to investing cash again. Continue Reading

Natixis Taking Focus

Natixis in its second quarter presentation explained that it has decided, for the next 3 years, to focus its shipping business on energy related assets, ie. oil and product tankers, gas carriers, offshore support vessels and drilling and production assets.

However, the size of the global shipping portfolio will not decrease, and the various desks and teams worldwide will remain in place. The Bank should therefore be in a position to be more active in this smaller market in the near future.

This new focus on energy related assets is only for new transactions, and no sale of its existing portfolio in non-energy related assets is contemplated.

Watson, Farley & Williams LLP Advises in High Profile KOGAS Project Financing

The Singapore office of Watson, Farley & Williams LLP (“WFW”) advised on the high profile Korea Gas Corporation (“KOGAS”) refinancing for three 1999 built LNG carriers.  The 138,200 cbm built LNG carrier “Hanjin Muscat” is on bareboat charter to Hanjin Shipping Co., Ltd, the 138,100 cbm built LNG carrier “SK Summit” is on bareboat charter to SK Shipping Co., Ltd. and the 135,000 cbm built LNG carrier “Hyundai Technopia” is on bareboat charter to Hyundai Merchant Marine Co., Ltd.  All three LNG carriers are operating under long term contracts of affreightment with KOGAS. Continue Reading

Surveying the Credit Markets

Marine Money has concluded the collection of data for its 2008 shipping banker survey and would like to sincerely thank all who have participated. We are currently concluding work on our annual shipping portfolio league table and would like to thank the following banks for their cooperation and contribution to the development of a transparent and well-informed ship finance industry: Bank of Ireland, Bank of Scotland, Bremer Landesbank, Calyon, Commerzbank, Danish Ship Finance, Danske Bank, Deutsche Bank, Deutsche Schiffsbank, DnB NOR, Dresdner Bank, DVB, Helaba, HSH Nordbank, HVB, JP Morgan, KfW, Lloyds TSB, Natixis, Nordea and RBS. If you don’t see your bank’s name on the list, think it belongs there, and haven’t been in touch with us this weekend, please send an email to nhuvane@marinemoney.com ASAP to ensure you are included. Both survey and portfolio data will be released in the upcoming May issue of Marine Money.

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