Sovcomflot Tops the Marine Money's "Deal of the Year" Rating for Project Financing of LNG Carriers Construction

Sovcomflot’s $316-mln project financing transaction is recognized by the  international shipping magazine Marine Money as one of the best financial  transactions in 2013 and receives “The Project Financing Deal of the Year”  award.

The 10 year non-recourse project facility will finance two  ice-class LNG carriers that will operate under long-term charters with Gazprom  group. The pairing of Sovcomflot with Gazprom provided for one of the best  structured and most competitive deals of the year, writes Marine Money. The  transaction was very well received by the banking market with initial  oversubscription of more than 2.5 times.

“On the back of Sovcomflot’s  reputation and the cash flows from the Gazprom charters, the borrowers obtained  highly favorable non-recourse financing with a long tenor and high gearing. The  facility is a 10 year post-delivery term loan financing 80% of the contract  price of the vessels, which fully covers payment of the delivery installments  under the shipbuilding contracts. The repayment profile is 15 years to zero, in  line with the committed period of the time charter contracts, resulting in a 33%  balloon at the end of the 10 year tenor”.

Nikolai Kolesnikov, Sovcomflot  EVP & Chief Financial Officer said, “This is the fourth year in a row that  Sovcomflot financing transactions have received Marine Money’s “Deal of the  Year” awards, each time for a different financial instrument. We are grateful to  Marine Money for their high recognition of our latest innovative project  financing deal that we put together with our banking partners ING, KfW IPEX-Bank  and SMBC.”

The Velikiy Novgorod series of LNG carriers of Atlanticmax  type and cargo capacity of 170,200 m3 are among the top-of-the-range vessels.  The first ship has already started operations in January 2014, the second LNG  carrier, Pskov, will be commissioned in the coming September. These ships are  capable to carry gas in conditions of year-round long navigation from almost all  available LNG terminals all across the world, including the Russia’s first LNG  terminal in Prigorodnoye (Sakhalin-2 Project, Sakhalin Region) and the oncoming  Vladivostok-LNG terminal.