ICBC contributes to $244.5 million syndicated green loan for FPSO Alexandre de Gusmao Construction Project

Project narrative

On October 20, 2021, China Export and Credit Insurance Corporation (Sinosure) and SBM Offshore signed a framework agreement related to project finance arrangements for various FPSO projects. Then, in June 2023, Mero 4 Owning B.V. — a special purpose vehicle and joint venture of SBM Offshore (55% ownership stake), Mitsubishi Corporation (25% ownership stake), and Nippon Yusen Kabushiki Kaisha (20% ownership stake) — secured a $1.615 billion syndicated debt financing package for the FPSO Alexandre de Gusmao Construction Project. The package consisted of four loans: a $505 million uncovered term loan with a 16-year maturity and an annual interest rate of SOFR plus 280-375 basis points, a $244.5 million green loan with a 16-year maturity and an annual interest rate of SOFR plus 250-375 basis points, a $400 million SACE-covered term loan with a 16-year maturity and and annual interest rate of SOFR plus 240-245 basis points, and a $465.5 million green loan with a 16-year maturity and an annual interest rate of SOFR plus 240-245 basis points. These loans benefit from insurance cover from three international export credit agencies (ECAs), including Italy’s Servizi Assicurativi del Commercio Estero (SACE) and China’s Sinosure. Participants in the $505 million uncovered term loan included Mizuho Bank – $100 million; MUFG – $75 million; ING Bank – $60 million; SMBC (coordinating bank) – $60 million; ABN Amro – $50 million; Crédit Agricole – $50 million; Santander – $45 million; Societe Generale – $40 million; and NTT Finance Corporation – $25 million. Participants in the $244.5 million green loan included ICBC – $100 million; ING – $44.5 million; China Construction Bank – $40 million; Mizuho Bank – $30 million; and NTT Finance Corporation - $30 million. Participants in the $400 million SACE-covered term loan included Santander – $135 million; Societe Generale – $70 million; Crédit Agricole – $60 million; SMBC (coordinating bank) – $45 million; ING Bank – $35 million; MUFG – $30 million; and ABN Amro – $25 million. Participants in the $465.5 million green loan included MUFG – $95 million; Societe Generale – $90 million; Mizuho Bank – $70 million; ING – $60.5 million; Crédit Agricole – $55 million; NTT Finance Corporation - $50 million; and SMBC – $45 million. The $2.313 billion project was financed according to a debt-to-equity ratio of 70:30. Equity contributions worth $698 million were divided across: SBM Offshore ($383.9 million), Mitsubishi Corporation ($174.5 million), and Nippon Yusen Kabushiki Kaisha ($139.6 million). Prior to obtaining financing, SBM Offshore in November 2021 signed a 22.5-year offtake agreement with state-owned oil giant Petrobras for the lease and operation of the Alexandre de Gusmão FPSO. Then, in December 2021, SBM Offshore secured a $620 million, 12-month bridge loan with undisclosed lenders to finance initial construction works. The bridge facility was retired upon financial close of the project finance facilities, at first drawdown of the project loan. SBM Offshore first commissioned Alexandre de Gusmão in December 2019 as part of its Fast4Ward® program, and the hull was later developed by China Merchants Industry Holdings. Then, in March 2022, SBM Offshore divested (sold) a minority stake in the FPSO to Japanese partners Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha (NYK). After the divestment, Mero 4 Owning B.V. was jointly owned by SBM Offshore (55% ownership stake), Mitsubishi Corporation (25% ownership stake), and Nippon Yusen Kabushiki Kaisha (20% ownership stake). In 2023, the topsides fabrication of the FPSO progressed, allowing for the commencement of the module lifting campaign at the yard in China. The Alexandre de Gusmão FPSO is expected to be deployed in the Mero field, located in the Santos Basin some 160 km offshore Rio de Janeiro. The unit is expected have a daily processing capacity of 180,000 barrels of oil and 12 million cubic meters of gas. Upon deployment, it is expected to be connected to 15 existing wells. Initial oil production is expected in 2025. The combined Mero field is operated by Petrobras (38.6%), in partnership with Shell Brasil (19.3%), TotalEnergies (19.3%), CNPC (9.65%), CNOOC (9.65%) and Présal Petroleo SA – PPSA (3.5%).