Active Mixed AidData Chinese Aid

CDB contributes to $480 million syndicated loan for Sevan Driller debt refinancing in March 2011

$60M USD

Funder	China Development Bank (CDB)
Recipient Organization	Sevan Drilling Pte Ltd.
Country	Brazil
Start Date	Mar 01, 2011
End Date	Oct 07, 2028
Duration	6,430 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`58650`

Grant Description

China Development Bank contribution to USD 480 million syndicated loan for Sevan Driller debt refinancing in March 2011 In March 2011, Sevan Drilling Pte Ltd — a special purpose vehicle and indirectly wholly owned subsidiary of Sevan Drilling ASA — entered into a credit facility with a syndicate of lenders with NIBC, ING Bank, DVB and China Development Bank as Mandated Lead Arrangers (“MLA’s”).

NIBC was the Facility Agent and DVB was the Security Trustee. The syndicate also included GIEK/Eksportfinans, Banco Itau, Natexis and DEKA Bank. Interest accrued at LIBOR plus a margin of 350 basis points. The final maturity of the facility’s commercial tranche was June 9, 2016. The final maturity of the GIEK/Eksportfinans tranche June 9, 2018.

The loan, which had fully disbursed by February 2013, was to be repaid in quarterly installments.

The loan facility was structured as a project finance facility on a single purpose basis, with securities customary in this type of financing, including, inter alia, a mortgage over the Sevan Driller, assignment of earnings and insurances, pledge of accounts, security in various contracts, and share pledges.

The loan agreement contained customary provisions for agreements of this nature, such as (i) mandatory prepayment provisions relating to loss events, termination of charter and other project contracts, (ii) restrictive covenants regarding, inter alia, dividend distribution (which may affect availability of upstream funds to the Company), the operation and sale of the unit, change of ownership, and amendments to material contracts, and (iii) detailed reporting and compliance requirements.

The loan was guaranteed by Sevan Drilling ASA.

The purpose of the loan was to refinance a $250 million loan signed August 31, 2007 and a 1 billion NOK bond issued December 7, 2006 for the Sevan Driller.

Sevan Driller was built between May 2007 and mid-to-late 2009 in COSCO's Nantong, then later Qidong, shipyards in China. In June 2010, Sevan Driller commenced drilling operations off the coast of Brazil for Petrobras.

It is a 6th generation Sevan 650 DP semi-submersible offshore drilling rig with internal storage capacity of up to 150,000 barrels of oil. On January 3, 2013, Sevan Drilling ASA announced that Sevan Driller had a technical uptime of 92.7% in December 2012.

After successfully completed the well it was drilling in the Santos basin, Sevan Driller moved to Guanabara Bay offshore Rio de Janeiro.

On February 4, 2013, Sevan Drilling ASA announced that Sevan Driller returned to a new location in Santos Basin and started required testing of the rig on the new location on January 24, 2013. Sevan Brasil achieved a technical uptime of 97.0% in January 2013. The Petrobras contract for Sevan Driller runs until June 2016 while the contract for Sevan Brasil runs until June 2018.

Then, on July 23, 2013, Sevan Drilling Limited announced that it had signed a $1.75 billion five-year secured corporate loan agreement with a syndicate of commercial banks and export credit agencies (including China Eximbank) for the purpose of refinancing all outstanding debt of the company related to the two operational drilling rigs (Sevan Driller and Sevan Brasil) as well as financing for the delivery of Sevan Louisiana and Sevan Drilling Rig 4 (both of which were under construction at COSCO shipyard.

The loan syndicated was coordinated by ING Bank N.V. As of November 2013, Sevan Drilling Limited had drawn down $1.4 billion of the $1.75 billion bank facility.

📋 Staff Comments

The exact size of China Development Bank’s contribution is unknown. For the time being, AidData assumes that all eight of the known members of the lending syndicate contributed equally ($60 million) to the $480 million loan.
IJ Global lists CDB's contribution to the syndicate as $96 million. However, this appears to be an estimate based on an incorrect number of banks in the syndicate (IJ Global lists only five participating banks, instead of eight). Therefore, the equal contribution assumption is applied by AidData instead of using the $96 million number.
For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
Sevan Drilling Pte Ltd. is a special purpose vehicle that is legally incorporated in Singapore created for the construction and management of the Seven Driller. It is an indirectly and wholly owned subsidiary of Sevan Drilling ASA, a public limited liability company organized under the laws of Norway and international offshore drilling contractor specializing in ultra deep water rigs. Sevan Marine ASA was formerly the parent company of Sevan Drilling ASA, but in December 2011, Sevan Marine was acquired by Seadrill Ltd. Thus, Seadrill became the owner of 28.52% of Sevan Drilling ASA's shares, becoming the largest shareholder. For an in-depth discussion of the company's ownership structure and mechanism for contracting with Petrobras, see pages 69-73 of the Sevan Drilling ASA bond prospectus dated February 12, 2013.
The 2007 loan that is being refinanced included GE Energy Financial Services, GE Transportation Finance and DVB Group Merchant Bank (Asia) Ltd. as the Mandated Lead Arrangers and was fully underwritten by the lead arrangers, partially guaranteed by Garantinstituttet for eksportkreditt (GIEK - Norwegian Export Credit Agency), and further syndicated to other unknown banks. It had a final maturity date of June 4, 2016 and an interest rate of LIBOR + 4.5%. No evidence of Chinese official financing has been identified for the original loan. See Sevan Marine's prospectus dated July 12, 2010 for more information about the debt being refinanced.

📚 Sources & References

Sevan Driller Refinancing 2011, silo.tips_sevan-drilling-asa
Sevan Driller
SEVAN DRILLER
SEVAN DRILLER, https://web.archive.org/web/20210803044940/https://www.ingwb.com/insights/articles/sevan-drilling-deepwater-innovation-funded#:~:text=Sevan%20Drilling%20%2D%20Deepwater%20innovation%20funded
Sevan Drilling ASA: New Financing Agreed
Sevan Drilling closes and draws down financing arranged by ING
US$400 Million Credit Facility for Sevan’s Advanced ``Deepsea Driller'' Oil & Gas Exploration and Production Vessel Co-Arranged by GE Units and DVB Group
Cosco wraps up Sevan Driller
Sevan Marine ASA USD 12.00% / NOK 13.25% Senior Secured Bond 2010/2015 Private Placement of USDm 200 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.