China Development Bank contributes to the $435 million USD term loan tranche of a $495 million USD syndicated loan to finance the construction of a drillship (Linked to Record ID#107133)

Project narrative

On October 9, 2009, a syndicate of five banks — including the Export-Import Bank of China and China Development Bank Corporation (CDB) — entered into a $495 million USD syndicated term loan and revolving loan credit facility agreement with Bully 2, Ltd. — a Cayman Islands-incorporated special purpose vehicle (SPV) and joint venture of Frontier Drillships 2, Ltd., a Cayman Islands-incorporated wholly-owned subsidiary of FDR Holdings Limited (Frontier), a Cayman Islands-incorporated independent drilling company (50% equity stake) and Shell EP Offshore Ventures Limited, an England and Wales-incorporated wholly-owned subsidiary of England and Wales-incorporated Anglo-Dutch oil company Royal Dutch Shell plc (50% equity stake) — to finance the construction of the Frontier Bully II drillship. This facility was divided into three tranches: a $435,000,000 USD secured term loan facility, a $10,000,000 USD secured revolver facility, and a $50,000,000 USD secured cost overrun term loan facility. This loan carried a maturity date of April 15, 2018 (a maturity period of 8.5 years) or seven year from the start of drilling operations. This loan carried a variable interest rate based on LIBOR. For the senior loans, a margin would equal to 2.50% prior to the delivery date, then 2.30% from delivery to the start drilling operations, and to 2.25% from the start of drilling operations for six years, then to 2.40%, provided of the borrower had an utilization rate of at least 95% for three consecutive months at any time after the start of drilling operations, the margin would equal 2.15% when it would normally be 2.25% and 2.30% when it would otherwise be 2.30%, so long as the rate remained about 95%; if the rate was at least 97.5% for three consecutive months, the margin would be 2.10% and 2.25% respectively. For the cost overrun term loan, the margin would be 3.50% prior to drilling operations and then 3.25% thereafter. This loan was secured by (i.e. collateralized against) by a collateral account, the Frontier Bully II drillship, relevant insurance policies, relevant earnings, assignments of rights under the offshore drilling rig contract dated as of March 20, 2008, and amended by Amendment No. 1 dated June 18, 2008 between Shell EP Wells Equipment Services B.V. and Bully 2, rights under the construction contracts for the drillship, including the construction contract for the vessel with Shanghai Shipyard Co., Ltd. dated June 23, 2007, an integration contract for the vessel with Keppel Shipyard Limited dated January 22, 2008, and rights under the construction contract for the drill tower on the vessel with Huisman Special Lifting Equipment B.V. dated March 28, 2008, and amended September 8, 2008, a charged asset and account under a Singapore deed, each loyal payment account, and all other real, personal, or mixed property of any security with respect to which a lien is granted as charged by Bully 2, Ltd. and a pledge of ordinary shares of the Bully 2 pledged by its owners Frontier Drillships 2 and Shell EP Offshore Ventures Limited. Standard Chartered Bank served as collateral agent. China Eximbank, CDB, Standard Chartered Bank, and HSBC Bank served as senior lenders (contributing to the $435 million USD term loan tranche and possibly the $10 million USD revolver) and mandated lead arrangers. Record ID#107133 captures China Eximbank's contribution. Record ID#107136 captures CDB's contribution. Standard Chartered Bank served as lead arranger. RZB Finance LLC served as cost overrun lender and lead arranger. Standard Chartered Bank served as administrative agent and collateral agent. This was an amendment and restatement (replacement / refinancing) of the original credit agreement dated October 21, 2008, now syndicated. The proceeds were to be used by the borrower partly finance the construction of the Frontier Bully II drillship, to registered under the laws and flag of the Republic of the Marshall Islands, and to operate the vessel under its offshore drilling rig contract with Shell EP Wells Equipment Services B.V. Shanghai Shipyard Co., Ltd. was responsible for construction, Keppel Shipyard Limited was responsible for integration contract for the vessel, and Huisman Special Lifting Equipment B.V. was responsible for the construction of the drill tower on the vessel. The drillship cost $600 million USD to construct and designed to drill ultradeep wells 10,000-feet under the surface and featured dynamic propeller thrusters to hold the ship steady against harsh ocean conditions. Noble Corporation acquired Frontier in 2010, so the vessels was renamed Noble Bully II. Noble Bully II was set to work in Brazil. The vessel was delivered around the end of 2011.