Sovcomflot’s US$ 316 million project financing transaction for the construction of LNG carriers has been recognised by the international shipping magazine Marine Money as one of the best financial transactions of 2013. Sovcomflot has received ‘The Project Financing Deal of the Year’ award.
The project facility will finance two ice-class LNG carriers that will operate under long-term charters with Gazprom group. Marine Money explained that the cooperation between Sovcomflot with Gazprom provided for one of the best structured and most competitive deals of the year. The transaction was very well received by the banking market, with initial oversubscription of more than 2.5 times.
LNG carrier financing
Commenting on the award, Marine Money said: “On the back of Sovcomflot’s reputation and the cash flows from the Gazprom charters, the borrowers obtained highly favorable non-recourse financing with a long tenor and high gearing. The facility, led by ING, is a 10 year post-delivery term loan financing 80% of the contract price of the vessels, which fully covers payment of the delivery installments under the shipbuilding contracts. The repayment profile is 15 years to zero, in line with the committed period of the time charter contracts, resulting in a 33% balloon at the end of the 10 year tenor”.
Nikolai Kolesnikov, Sovcomflot CFO commented: “This is the fourth year in a row that Sovcomflot financing transactions have received Marine Money’s ‘Deal of the Year’ awards, each time for a different financial instrument. We are grateful to Marine Money for their high recognition of our latest innovative project financing deal that we put together with our banking partners ING, KfW IPEX-Bank and SMBC.”
Global LNG terminals
The Velikiy Novgorod series of LNG carriers are of Atlanticmax type and have a cargo capacity of 170 200 m3. The first ship started operations in February 2014, and the second LNG carrier will be commissioned in September. These ships are capable to carry gas in year-round weather conditions from almost all global LNG terminals, including Russia’s Sakhalin-2 LNG terminal and the Vladivostok LNG terminal.
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/lng-shipping/05032014/sovcomflot_lng_financing_wins_award_246/