Opinion has been divided over the nature of the response Oman LNG will get from the banks. ‘It looks like they’re going to get 14-16 years tenor – not the 18 they were originally asking for – and that there will be a cash sweep rather than a balloon,’ said one of the bankers preparing to bid in early November. ‘On the tactical level, I suspect the aim is to get as many banks committed as possible at senior levels. They will be trying to avoid running into a sub-underwriting problem and they’ve also got a very tight schedule.’
Bankers say that Oman LNG remains determined to reach financial close by 7 December, and that it has been rolling over some short-term debt with that date in mind.
‘I simply don’t understand the rush,’ said another banker preparing a bid. ‘If they want to push this, there is certainly a deal to be done, but the terms could get considerably better if they are prepared to wait, maybe just a couple of months. If they push this through now they will be paying an uncertainty premium.’
It is probable that if the transaction is closed by the December deadline, the step-up pricing will be somewhere near 120-160 basis points over Libor.
On 6 November, US credit rating agency Moody’s Investors Serviceassigned a preliminary rating of A3 to the deal.
The 9 November bid deadline is the third to be given to banks. The original bid deadline was 21 September, but the suicide attacks on New York and Washington on 11 September caused this initially to be moved to 5 October and then suspended altogether (MEED 12:10:01).
A full list of the banks invited to bid has not been released but it is understood to include the seven lead arrangers on the original facility – ABN AMRO, Gulf International Bank, Citibank, Bank of Tokyo-Mitsubishi, Royal Bank of Scotland, Credit Agricole Indosuezand Korea Exchange Bank (MEED 7:9:01). Also likely to be included will be the participants in the syndication of the original transaction.
Citibankis acting as financial adviser to Oman LNG (MEED 22:6:01).