China Eximbank contributes $308 million USD to a $440 million USD loan to Seadrill Limited for the acquisition of two tender rigs and two jack-up drilling rigs

Project narrative

On December 4, 2012, the Export-Import Bank of China and the London Branch of Citibank N.A. signed a $440 million USD secured syndicated credit facility (loan) agreement with Seadrill Limited for the acquisition and delivery of two tender rigs and two jack-up drilling rigs (T-15, T-16, West Oberon, West Telesto). The loan consisted of two tranches: a $308,000,000 USD tranche from the Export-Import Bank of China (referred to as the ‘CEXIM Facility’) and a $132,000,000 USD tranche with the London Branch of Citibank N.A. (referred to as the ‘Commercial Facility’). The Export-Import Bank of China and the London Branch of Citibank, N.A. served as bookrunners and mandated lead arrangers. The London Branch of Citibank N.A. served as the security agent and the account bank. Citibank International Plc served as the facility agent. The facility carried an interest rate of 3-month LIBOR plus a margin of 3.25%. The final maturity date was the earliest of (a) the fifth anniversary of the final utilization date of the loan, (b) the sixth anniversary of the first utilization date of the loan, and (c) December 15, 2017. Seadrill T-15 Ltd., Seadrill T-16 Ltd., Seadrill Telesto Ltd., and Seadrill Oberon Ltd. — wholly owned subsidiaries of Seadrill Limited and owners of the rigs — pledged the T-15, T-16, West Telesto, and West Oberon rigs, respectively, as sources of security (collateral) to the lenders. COSCO (Nantong) Shipyard was responsible for the construction of T-15 and T-16, while Dalian Shipbuilding Industry Company (DSIC) was responsible for the construction of West Telesto and West Oberon. On May 17, 2013, Seadrill Partners Operating LLC, a wholly owned subsidiary of Seadrill Partners LLC completed the acquisition of the companies that own and operate the tender rig T-15 from Seadrill Limited for a total purchase price of $210 million USD. The T-15 was a barge-type, self-erecting tender rig built in 2013 by COSCO (Nantong) Shipyard. The T-15 was delivered under its current contract to its current customer, Chevron Thailand Exploration and Production Limited, a subsidiary of Chevron, in May 2013 and commenced operations in July 2013. The T-15 is contracted for a five-year period with Chevron in Thailand at an initial contract day rate of $115,500 USD. Management of operations for the T-15 was to be subcontracted to Seadrill Asia Limited (Seadrill Asia), a wholly owned subsidiary of SapuraKencana Petroleum Berhad. Seadrill International was responsible for all costs of operating the T-15, which included a management fee of $9,200 USD per day payable to Seadrill Asia. The secured credit facility agreement was amended on April 30, 2013, May 16, 2013, October 18, 2013, September 18, 2014, and October 16, 2014. Pursuant to a transaction closing on August 16, 2017, the $440 million USD facility was amended and restated to effectuate the split between the Seadrill Limited and Seadrill Partners corporate groups, resulting in only a portion of the obligations remaining outstanding to Seadrill Limited. The United Kingdom Branch of Citibank Europe plc, UK branch served as the agent of this deal. Under this amended facility, the collateral included a first priority lien on, and security interest in, the rig West Telesto, assignments of earnings, earnings accounts, charterparties and insurance policies with respect to West Telesto and a share charge over the shares of the drilling unit owner, as well as a second priority liens on and security interests in Rigs T-15 and T-16 and assignment of earnings, earnings accounts, charterparties and insurance policies with respect to Rigs T-15 and T-16.