NIBC leads financing of offshore vessels for use in Brazil

Client
Duh Boats 2 is part of US company Edison Chouest Offshore (ECO), the largest operator of offshore service vessels used in the offshore oil and gas industry.

Case
NIBC acted as mandated lead arranger, bookrunner, facility agent and hedge provider in a USD 108 million loan to Duh Boats 2. The senior secured credit facility will be used to partially fund four platform supply vessels that are under construction in Poland. Once completed, two will be put to work in Brazil for Spanish oil company Repsol, the company is marketing the other two vessels which will be delivered in 2014.

Solution
Platform supply vessels (PSVs) are used mainly to transport goods and people to and from offshore oil platforms. These highly specialised vessels are the workhorses of the ECO fleet, supporting the majority of deepwater operations in the US Gulf.

"It's not the first time we've supported ECO," says NIBC's Jeroen van der Putten, Associate Director Oil & Gas Services. "In 2010, we helped another ECO entity to raise financing for Aiviq, an ice-breaking anchor handling tug supply vessel used by Royal Dutch Shell."

"Given our focus on the oil and gas sector and good relationship with the company, we were pleased we could put our experience to great use for this major player in the specialist offshore service industry."

NIBC used its expertise to pull the transaction together from start to close. We contacted Duh Boats 2 when it ordered the vessels in Poland to discuss the financing. We then constructed the loan and, once indicative terms had been agreed, invited Norwegian bank DNB in New York and French CIC to join the transaction.

As lead bank, we were also instructed to act as coordinator for the technical advisor, who oversees the construction on the banks' behalf to make sure it runs to schedule, and for the legal advisor drafting the loan agreement.

The credit facility has a tenor of five years after delivery of the first vessels and Duh Boats 2 can draw under the facility during construction. In addition to the financing, NIBC and DNB closed a number of swaps with the company to hedge a large part of the interest exposure.