Stephenson Harwood has advised Standard Chartered Bank on a unique US$1.3 billion project finance structure, relating to the pre- and post-delivery financing of Yinson Production's floating production, storage and offloading unit 'Agogo FPSO' (the FPSO).
Singapore-based Yinson Production is a leading independent owner and operator of FPSOs and part of Yinson Group, a global energy infrastructure and technology company. The FPSO will operate in Angola pursuant to the firm contract for the provision, operation and maintenance of the FPSO with Azule Energy, a 50/50 joint venture between BP and Eni, Angola’s largest independent oil and gas producer, which was awarded in February 2023. The contract has a firm operation period of 15 years, with additional optional periods of up to five years and a total contract value of up to approximately US$5.7 billion.
The financing is provided by a consortium of 13 lenders, including international banks and institutional investors. Stephenson Harwood acted for Standard Chartered Bank (Singapore) Ltd. in its capacity as global coordinating bank for the transaction, providing support and advice in relation to due diligence on the project documents as well as the financing documentation and The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch in its capacity as facility agent and security agent.
The financing comprises three pari-passu secured tranches with staggered maturities of up to 10 years post-delivery of the FPSO. Subject to satisfaction of certain conditions, the financing will become non-recourse post-delivery of the FPSO. The commercial multi-tranche structure is the first of its kind in the industry, combining different lender groups of traditional banks and institutional investors in a single transaction.
In addition to the innovative financing structure employed, the FPSO is designed with a comprehensive suite of carbon emission reduction technologies, including the first-ever carbon capture technology onboard an FPSO, resulting in an estimated reduction of carbon emissions of 27% compared to a conventional design.
Stephenson Harwood partner, and global head of maritime, trade and offshore finance, Ian Mace said: "We have been delighted to support Standard Chartered Bank in respect of this ground-breaking transaction. We are uniquely positioned to advise on these types of projects, combining our FPSO contracts and finance expertise to provide a seamless service. The combination of traditional banks and institutional investors required complex solutions to be found, and evidences that differing types of capital can be combined in this way in this sector."
Standard Chartered’s Global Head of Transportation Finance, Abhishek Pandey, said: “The transaction marks a fantastic collaboration across all parties, especially as the structure involved balancing the interests of lenders with different risk profiles. We are pleased to have played a lead role in contributing to the success of this transaction with Stephenson Harwood, who has been a valuable partner and played a critical role on this journey.”
Yinson Production’s Chief Financial Officer, Markus Wenker, said: “The successful closing of this transaction is a true milestone as it is Yinson Production’s single largest financing transaction to date and the first commercial multi-tranche financing structure with staggered maturities in the FPSO industry. The innovative structure of the transaction is a testament to our commitment to innovation and excellence, not only in respect to improving our environmental footprint, but also in the area of finance. Stephenson Harwood’s expertise and collaborative effort as lenders’ counsel made a true difference in the successful completion of the transaction.”
The Stephenson Harwood team was led by partner and global head of maritime, trade and offshore finance Ian Mace (London) together with partner Pedram Norton (Singapore), supported by Singapore-based managing associate Rebecca Crookenden and associates Romie Yeo and Benjamin Tay. Further Singapore law advice was provided by Virtus Law partner Jason Yang, senior associate Angeline Yap, and associate Thiyana Ilangchizian. Stephenson Harwood partner Ezio Dal Maso and associate Alberta Longanesi Cattani advised on the Italian law aspects of the transaction.
