Mizuho Financial Grouphas won the lead arranging mandate for the commercial tranche of the debt package for two tankers that will be used to ship liquefied natural gas (LNG) to Japan from the proposed Qalhat LNG project.
Mizuho Financial Grouphas won the lead arranging mandate for the commercial tranche of the debt package for two tankers that will be used to ship liquefied natural gas (LNG) to Japan from the proposed Qalhat LNG project. The commercial debt package is expected to be worth about $100 million and have a tenor of 15 years. Bankers say the average margin on the facility is about 75 basis points over Libor. The second tranche, worth about $150 million, is expected to come from the Japan Bank for International Co-operation. The borrowing will be split between two special purpose vehicles (SPVs) - one for each vessel - which will both have Oman Shipping Companyas the majority shareholder and Mitsui OSK, the operator of the ships, taking a minority position. Itochu Corporationwill take an equity position in one of the SPVs and Mitsubishi Corporationwill be in the other: both companies have signed offtake agreements for the supply of LNG (MEED 2:7:04). The ships are currently under construction in Japan at the shipyards of Mitsui and Kawasaki Shipbuilding Corporation. Movement on the financing of the ships has coincided with a minor extension to 23 July of the bid deadline for banks responding to the preliminary information memorandum (PIM) on a $175 million debt package to cover the equity position Oman LNGwill take in the Qalhat LNGproject company (MEED 2:7:04). It is possible that the delays in selecting a group of mandated lead arrangers (MLAs) for the Oman LNG equity stake could impact the formation of the MLA group for the $550 million-600 million commercial debt package for Qalhat LNG itself (MEED 4:6:04). 'The schedule saw the Qalhat PIM coming in July,' says an interested banker. 'With the summer lull approaching, and the need to get Oman LNG shaped up, it is now looking like they might have to wait until September. The window is closing fast.' Citigroupis acting as financial adviser on both the Oman LNG and the Qalhat transactions.