Skip to content
AidData logo

Overview

CCB Financial Leasing enters into a sale-and-leaseback agreement worth $206 million USD with Höegh LNG for one floating storage regasification unit

Commitments (Constant USD, 2023)$213,825,423
Commitment Year•2019Country of Activity•BermudaDirect Recipient Country of Incorporation•BermudaSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jun 7, 2019
Start (actual)
Aug 27, 2019
End (actual)
Aug 27, 2019
Last repayment (originally scheduled)
Jun 4, 2031

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

State-owned Commercial Banks

  • CCB Financial Leasing Co., Ltd. (CCBFL)

Receiving agencies

Private Sector

  • Höegh LNG Holdings Ltd

Implementing agencies

Private Sector

  • Samsung Heavy Industries Co., Ltd. (SHI)

Loan description

CCB Financial Leasing enters into a sale-and-leaseback agreement worth $206 million USD with Höegh LNG for one floating storage regasification unit

Interest type•UnknownMaturity•12 years

Narrative

Full Description

Project narrative

In September 2018, CCB Financial Leasing Co., Ltd. — a leasing company and wholly-owned subsidiary of China Construction Bank Corporation (CCB) — issued a commitment letter for a sale-and-leaseback agreement worth up to $206 million USD with Höegh LNG Holdings Ltd — a Bermuda-incorporated and domiciled company listed on the Oslo Børs in Norway that owns and operates floating LNG import terminals, carriers, and floating storage and regasification units — for one floating storage regasification unit (FSRU). The commitment latter featured a maturity period of 12 years, a 20-year amortization profile, and an expected fixed interest rate at around 6%, all subject to final documentation. Then, on June 7, 2019, CCB Financial Leasing entered into a sale-and-leaseback agreement worth up to $206 million USD with Höegh LNG Holdings Ltd for one FSRU. This sale-and-leaseback carried a maturity period of 12 years. The proceeds were to be used by the borrower to fund 70% of the delivery cost of the FSRU (specifically the final installment at delivery), then increasing to 80% once long-term employment for the FSRU was secured. The FSRU, Höegh LNG's 10th, was under construction at Samsung Heavy Industries. It was scheduled for delivery in the second quarter of 2019. The FSRU, named the Höegh Galleon, was delivered to Höegh LNG on a 12-year charter on August 27, 2019.

Staff comments

1. A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset. The lessor is the legal owner of the asset, while the lessee obtains the right to use the asset in return for regular rental payments. Under a capital lease (a financial arrangement where the lessee/borrower uses an asset and pays regular installments plus interest to the lender/lessor), rental payments are usually classified as interest and obligation payments, similarly to a mortgage (with the interest calculated each rental period on the outstanding obligation balance). AidData codes capital leases as loans. 2. Sale and leaseback (or sale-leaseback) agreements are generally considered to be off-balance-sheet hybrid debt products.