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Overview

China Eximbank contributes to $787 million syndicated debt financing package for acquisition of four LNG vessels (Pan Asia, Pan Americas, Pan Europe and Pan Africa)

Commitments (Constant USD, 2023)$403,555,177
Commitment Year•2014Country of Activity•Marshall IslandsDirect Recipient Country of Incorporation•Marshall IslandsSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jul 25, 2014
Start (planned)
Sep 1, 2017
Start (actual)
Oct 13, 2017
End (planned)
Jan 1, 2019
Last repayment (originally scheduled)
Jul 21, 2031

Stakeholders

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

Ultimate beneficial owners

At least 25% Chinese ownership

Funding agencies

State-owned Policy Banks

  • Export-Import Bank of China (China Eximbank)

Cofinancing agencies

Private Sector

  • Australia and New Zealand Banking Group (ANZ)
  • BofA Securities, Inc. (Formerly Bank of America Merrill Lynch (BAML))
  • Mizuho Bank, Ltd.
  • MUFG Bank, Ltd. (Formerly Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU))
  • Sumitomo Mitsui Banking Corporation (SMBC)

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • Pan Union Joint Venture

Loan description

China Eximbank and ICBC’s participation in $787 million syndicated debt financing package in 2014 for the acquisition of four LNG vessels in Marshall Islands

Interest type•UnknownMaturity•17 years

Narrative

Full Description

Project narrative

In July 25, 2014, Pan Union Joint Venture — a special purpose vehicle that is legally incorporated in the Marshall Islands and jointly owned by Teekay LNG Partners L.P (later renamed Seapeak LLC), China LNG, CETS Investment Management (HK) Co. Ltd. and BW Investments Pte. Ltd. — signed four, 17-year, syndicated limited-recourse debt facilities worth $787 million with a group of banks to partially finance the $1 billion procurement of four 174,400m3 LNG vessels (Pan Asia, Pan Americas, Pan Europe and Pan Africa) to be built by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China. The members of the lender syndicate included Australia and New Zealand Banking Group (ANZ), Bank of America Merrill Lynch, The Bank of Tokyo-Mitsubishi UFJ Ltd, China Eximbank, Mizuho Bank Ltd, Sumitomo Mitsui Banking Corporation and Industrial and Commercial Bank of China (ICBC). All of these lenders served as Mandated Lead Arrangers. China Eximbank reportedly contributed $393,500,000 to the syndicate, while the other lenders reportedly contributed the remaining $393,500,000. The vessels were to be delivered between between September 2017 and January 2019 and chartered (under 20-year fixed-rate time-charter contracts with extension options) to Methane Services Limited, a subsidiary of BG Group plc, as part of their global shipping fleet. In April 206, CNOOC announced that a 174,400m3 LNG carrier, the largest ever built in China was launched at Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. The vessel, named Pan Asia, was a dual-fuel diesel electric (DFDE) LNG tanker with a length of 290 meters, width of over 45 meters and a draft of over 26 meters. It was be used to ship 1.5 million tons of liquefied natural gas per year from the Queensland Curtis LNG project in Australia to the world’s third largest LNG importer, China. Then, on October 13, 2017, the Pan Union Joint Venture took delivery of its first LNG carrier newbuilding (Pan Asia).

Staff comments

1. Several sources refer to Pan Union Joint Venture as BG Joint Venture. 2. The debt facilities were provided to four special purpose vehicles, each holding one vessel and have a door-to-door tenor of up to 17 years. 3. Norton Rose Fulbright served as lender counsel. 4. Clifford Chance acted as sponsor counsel. 5. The size of ICBC’s contribution to the loan syndicated is unknown. For the time being, AidData assumed equal contributions across the lenders (ANZ, Bank of America Merrill Lynch, The Bank of Tokyo-Mitsubishi UFJ Ltd, Mizuho Bank Ltd, Sumitomo Mitsui Banking Corporation, ICBC) other than China Eximbank ($393,500,000/6=$65,583,333). This issue warrants further investigation. 6. CNOOC owns a 50 percent equity stake in QCLNG’s Train 1 has a deal in place for the supply of 3.6 mtpa for a period of 20 years.