Narrative
Full Description
Project narrative
On December 1, 2009, a syndicate of 4 banks — including China Eximbank — entered into a $160,000,000 USD senior secured syndicated loan agreement with Knutsen Shuttle Tankers XII KS — a limited partnership established under the laws of Norway and wholly-owned subsidiary of Norwegian shipping company Knutsen Group that primarily operates vessels for the transportation of freight on the deep seas between the U.S. and foreign ports. The use of the proceeds were to be used by the borrower to fund the installment payments on the construction of 2 shuttle tankers: Fortaleza Knutsen and the Recife Knutsen. The two ships were constructed by COSCO Nantong and have entered into operation. The maturity of the syndicated loan is approximately 6.67 years (final maturity date is on Aug 3, 2016). The syndicated loan was originally divided into two tranches of $80 million USD each. However, as of July 11, 2013, the borrowers had only committed $55,295,980.01 USD (Subtranche A1) and 57,846,768 USD (Subtranche A2), respectively. Each tranche was repayable in quarterly installments over five years with final balloon payments due at maturity of $54.9 million in March 2016 and $54.9 million in August 2016. The syndicated loan bore interest rate at 3-month LIBOR plus a margin of 3.0%. China Eximbank contributed $24,842,691 USD to Subtranche 1-A and $26,031,045.60 USD to Subtranche 1-B. While China Eximbank served as a lender and mandated lead arranger, DNB Bank ASA (Mandated lead arranger, bookrunner, agent and security trustee), Nordea Bank Norge ASA (mandated lead arranger and bookrunner) and Sumitomo Mitsui Banking Corporation Europe Limited also contributed to this loan. Moreover, Knot Shuttle Tankers AS and Knot Offshore Partners LP served as guarantors. The loan agreement was amended by supplemental agreements on February 14, 2021, July 6, 2012, February 27, 2013, an amendment and restatement deed on April 9, 2013, a fourth supplemental agreement on April 29, 2013, and a second amendment and restatement deed on July 11, 2013. At the time of the 2nd amendment in 2013, the Borrower requested that the loan be increased by an additional amount of up to $25,422,252 to be advanced to it for general corporate purposes of which $12,544,020 is to form an additional part of Tranche A and of which $12,878,232 is to form an additional part of Tranche B. DNB Bank ASA and Nordea Bank Norge ASA contributed to this increase. In June 2014, a new $140 million term loan was signed and drawn. No Chinese bank was involved. This new loan fully paid in November 2014 and replaced the $160 million loan facility secured by the Fortaleza Knutsen and the Recife Knutsen.
Staff comments
1. Knutsen Group is a fully integrated shipping company that provides full in-house shipping management including technical and commercial operation, chartering, as well as building supervision, conversion and project development. Knutsen is the largest shuttle tanker operator in the world, and a major operator of LNG carriers. 2. AidData has coded the interest rate of this syndicated loan (3.25%) as the sum of the 3-month average LIBOR rate in December 2019 (0.25%) plus the applicable margin (3%). For more information on interest rates, consult pages 26 on the credit agreement. 3. Shuttle tankers are a category of ships designed for oil transport from an off-shore oil field as an alternative to constructing oil pipelines. 4. The loan agreement can be accessed in its entirety via https://www.dropbox.com/scl/fi/lhzjpkx9402eh8qolry8l/Norway-2013-Syndicated-Loan-Involving-China-Eximbank-with-Knutsen-Shuttle-Tankers-XII-KS.pdf?rlkey=quzwqzlq4kf6lt91v49p0s2g2&e=1&dl=0 5. The loan's security package consists of "Guarantees, the Charter Assignments, the Borrower Shares Security, the General Partner Shares Security, the Mortgages, the Deeds of Covenant, the General Assignments, the Factoring Agreement, the Account Pledge and any and every other document from time to time executed to secure, or to establish a subordination or priorities arrangement in relation to, all or any of the obligations of any person to the Banks (or any of them) under this Agreement or any other Finance Document." Earnings accounts were required for both vessels throughout the security period.