SG Corporate & Investment Banking (SG CIB) and BNP Paribas (BNPP) have arranged a landmark limited recourse financing for a USD 320 million project related to the construction of two liquefied natural gas (LNG) carriers. This shipping project is sponsored by Oman Shipping Company S.A.O.C. (80%) — a company fully owned by the Government of the Sultanate of Oman — and Mitsui O.S.K. Lines, Ltd (20%).
These two gas carriers ‘Salalah LNG‘ and ‘Ibra LNG‘ will be time chartered on a long term basis to Qalhat LNG S.A.O.C., which owns and operates a natural gas liquefaction train and associated infrastructures in Qalhat, southeast of the Omani capital, Muscat.
‘Salalah LNG’ will enter into service in December 2005 and ‘Ibra LNG’ will be ready in mid 2006. Each of the vessels has a capacity of 147,000 cubic meters. They will be used by Qalhat LNG S.A.O.C. to transport liquefied gas from the Sultanate of Oman to various parts of the world under long term sale and purchase agreements. This will further strengthen the Sultanate’s leading position as a LNG producer and marketer.
The gas carriers are being built by Samsung Heavy Industries in the Republic of Korea.
SG CIB and BNPP, Joint Mandated Lead Arrangers, structured a financing package made up of a lease arranged by SG CIB and funded on a limited recourse basis by:
- a 12 year commercial credit facility (BNP Paribas acting as arranger, sole underwriter, bookrunner and global facility agent);
- and a 12 year export credit supported by KEIC (Korea Export Insurance Corporation) and jointly arranged by SG CIB and BNP Paribas (SG CIB acting as KEIC agent).
This financing structure is the first of its kind, and as such represents a landmark transaction for the banks and KEIC. It is the first ever export finance deal supported by KEIC for LNG tankers, the first export financing supported by KEIC for ships in a limited recourse finance structure and the first export finance deal covered by KEIC which is combined with a lease.
The seamless and rapid closing of this innovative and complex transaction is the result of the complementary strengths and the close cooperation between the two Mandated Lead Arrangers advised by Norton Rose and highlights the financial sophistication of the sponsors, Oman Shipping Company and Mitsui O.S.K. Lines, as well as the strong commitment of the Korea Export Insurance Corporation to support this transaction.
Note to editors
SG Corporate & Investment Banking SG CIB is the Corporate and Investment Banking arm of the Société Générale Group. Present in over 45 countries across Europe, the Americas and Asia, SG CIB is a reference bank specialising in:
- Euro capital markets. A top ten player in debt and equity segments (bonds, securitisations, syndicated loans, equity-linked and equity issues).
- Derivatives. Among the world leaders in equity derivatives and in many interest rate, credit, foreign exchange and commodities derivatives.
- Structured finance. Among the world leaders in export, project and structured commodity finance.
Combining innovation and quality of execution, SG CIB provides corporates, financial institutions
and investors with value-added integrated financial solutions. www.sgcib.com
About BNP Paribas
BNP Paribas is the first bank in the Euro zone in terms of net income (2004).
The group has one of the largest international banking networks, present in over 85 countries with close to 100,000 employees, including 67,000 in Europe.
European leader in banking and financial services, BNP Paribas has developed a significant presence in the United States and leading positions in Asia in its three core businesses:
- Corporate and Investment Banking
- Asset management & Services
- Retail Banking