SBM Offshore prices US$850 million senior secured notes transaction

Rhea-AI Summary

SBM Offshore has successfully priced an US$850 million non-recourse senior secured notes transaction through its subsidiary, Guara Norte S.à r.l., which owns the FPSO Cidade de Ilhabela. SBM Offshore holds 75% equity in Guara Norte. The notes, rated Ba1 by Moody’s and BB+ by Fitch, have a 5.198% fixed coupon and will be amortized over 13.5 years. The funds will be used to repay US$535 million in existing bank debt, unwind hedge arrangements, and cover transaction expenses. The oversubscribed offering is set to close on February 11, 2021.

Positive

• Successfully raised US$850 million with strong demand.
• Interest rate set at a competitive 5.198% fixed coupon.
• Transaction diversifies funding sources for project debt.

Negative

• Approximately US$535 million existing bank debt repayment may indicate prior financial pressure.
• Significant operational costs associated with unwinding hedge arrangements and transaction expenses (US$35 million).

February 9, 2021

SBM Offshore is pleased to announce the successful pricing of an US$850 million non-recourse senior secured notes transaction in a 144A/Reg S offering by a subsidiary company. The issuer of the notes is Guara Norte S.à r.l. (Guara Norte), which owns the FPSO Cidade de Ilhabela. SBM Offshore owns 75% of the equity in Guara Norte and the remaining 25% equity is held by Mitsubishi Corporation. The transaction is expected to close on February 11, 2021 at which date the notes will be issued and settlement will occur.

The notes are rated Ba1 (Moody’s) and BB+ (Fitch) and were priced at 99.995% of par value with a 5.198% fixed coupon which is paid semi-annually. The notes are fully amortizing over the 13.5 years tenor. The notes will trade at the Singapore Stock Exchange (SGX). The deal was significantly oversubscribed.

This is SBM Offfshore’s first issuance of a 144A/Reg S bond and as such this offering further diversifies its sourcing for project debt. Proceeds will be used to repay existing bank debt (approximately US$535 million, with a remaining tenor of approximately 4 years), unwind the existing hedge arrangements and pay for transaction related expenses (combined approximately US$35 million). The remaining cash (approximately US$280 million) will be distributed to Guara Norte’s shareholders.

The notes are being sold to qualified institutional buyers in the United States in accordance with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to persons outside the United States in accordance with Regulation S under the Securities Act. The notes have not been and will not be registered under the Securities Act or any state or other jurisdiction's securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state or other jurisdictions' securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the notes or any other securities, nor shall there be any offer, solicitation or sale of the notes or any other securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful.

 

Corporate Profile

The Company’s main activities are the design, supply, installation, operation and the life extension of floating production solutions for the offshore energy industry over the full lifecycle. The Company is market leading in leased floating production systems, with multiple units currently in operation.

As of December 31, 2019, the Company employs approximately 4,450 people worldwide spread over offices in our key markets, operational shore bases and the offshore fleet of vessels.

SBM Offshore N.V. is a listed holding company headquartered in Amsterdam, the Netherlands. It holds direct and indirect interests in other companies.

Where references are made to SBM Offshore N.V. and /or its subsidiaries in general, or where no useful purpose is served by identifying the particular company or companies “SBM Offshore” or “the Company” are sometimes used for convenience.

For further information, please visit our website at www.sbmoffshore.com.

The Management Board
Amsterdam, the Netherlands, February 9, 2021

Financial Calendar	Date	Year
Full Year 2020 Earnings – Press Release	February 11	2021
Annual General Meeting of Shareholders	April 7	2021
Trading Update 1Q 2021 – Press Release	May 12	2021
Half Year 2021 Earnings – Press Release	August 5	2021
Trading Update 3Q 2021 – Press Release	November 11	2021

 

For further information, please contact:

Investor Relations
Bert-Jaap Dijkstra
Group Treasurer and IR

Telephone:	+31 (0) 20 236 3222
Mobile:	+31 (0) 6 21 14 10 17
E-mail:	bertjaap.dijkstra@sbmoffshore.com
Website:	www.sbmoffshore.com

Media Relations
Vincent Kempkes
Group Communications Director

Telephone:	+31 (0) 20 236 3170
Mobile:	+31 (0) 6 25 68 71 67
E-mail:	vincent.kempkes@sbmoffshore.com
Website:	www.sbmoffshore.com

Disclaimer

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation. Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those in such statements. Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of the Company’s business to differ materially and adversely from the forward-looking statements. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “may”, “will”, “should”, “would be”, “expects” or “anticipates” or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans, or intentions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this release as anticipated, believed, or expected. SBM Offshore NV does not intend, and does not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances. Nothing in this press release shall be deemed an offer to sell, or a solicitation of an offer to buy, any securities.

 

Attachment

• SBM Offshore prices US$850 million senior secured notes transaction

FAQ

What is the significance of SBM Offshore's US$850 million notes transaction?

The transaction allows SBM Offshore to diversify its project debt sources and manage existing bank debt.

When will SBM Offshore's notes transaction close?

The transaction is expected to close on February 11, 2021.

What are the ratings of the notes issued by SBM Offshore?

The notes are rated Ba1 by Moody’s and BB+ by Fitch.

How will SBM Offshore utilize the proceeds from the notes?

Proceeds will be used to repay approximately US$535 million in bank debt, unwind hedge arrangements, and cover related expenses.

What is the coupon rate for SBM Offshore's newly issued notes?

The newly issued notes feature a 5.198% fixed coupon rate.