Sovcomflot $ 1.26 bln Debt Financing Complete

Maritime Activity Reports, Inc.

September 9, 2016

Courtesy SCF Group

Courtesy SCF Group

SCF Group completed a series of financing transactions in the total amount of USD 1.26 billion. The deals include USD 750 million of unsecured public debt and USD 512 million of bank loans raised for purposes of funding the fleet renewal and expansion programme and for the refinancing of maturing debt.

The latest in this series were new long-term credit facilities for a total amount of USD 252 million signed in August 2016, with a number of international banks including: Citibank; DVB Bank; ING Bank; Nordea Bank and Unicredit Bank. The funds raised are being used to finance the acquisition of nine ice-class tankers and two multifunctional icebreaking supply vessels as well as for refinancing of the Group’s existing bank debt.
Nikolai Kolesnikov, Executive Vice-President, Chief Financial Officer, said: “With this latest round of financing we have fully covered Sovcomflot’s capex funding requirements, including for the recently completed acquisition of nine ice-class tankers and two ice-breaking platform supply vessels, and addressed the Group’s refinancing needs. These new transactions clearly demonstrate the confidence of international lenders and investors in SCF Group, and we are grateful to our long-standing financial partners for their continued support of SCF’s business, M&A activity, and growth plans.”
Earlier in June 2016, SCF Group returned to the international debt capital markets with a new USD 750 million seven year Eurobond offering. The proceeds from the issue were used to fund a simultaneous tender offer for the Group’s outstanding Eurobonds due in 2017 and to refinance other indebtedness. The new issue and the tender offer were both structured in Reg S/144a format to facilitate broader investor coverage and were arranged by Citigroup, J.P. Morgan, Sberbank CIB, VTB Capital, and ING.
The new bond offering generated strong demand from investors and enabled very competitive pricing, with a coupon of 5.375 per cent which matched the coupon on the Group’s debut 2010 Eurobond issue, whereas the tender offer achieved one of the highest ever tender participation rates from Russia of 83 per cent.
Also, in June 2016, SCF Group signed a USD 260 million thirteen year loan agreement with VTB Bank for the financing of construction of the first Arctic LNG carrier for the Yamal LNG project. The vessel is due to be delivered in the first quarter of 2017.
The new financings have allowed the Group’s debt repayment profile to be enhanced significantly, have improved its liquidity position, and have strengthened the Group’s overall corporate credit standing. Sovcomflot is currently rated BB+(S&P), Ba1 (Moody’s) and BB (Fitch).

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