Brazil Sponsor Reignites Project Syndications

Queiroz Galvao, the Brazilian concessions operator, is rekindling the project loan syndications market with the $220m 7-year final Atlantic Star facility for a renewed Petrobras contract. The fully amortizing loan pays Libor plus 382bp – an unusual number because of a liquidity premium – and a banker away from the trade says fees are 200bp-250bp. The financing via WestLB is out to a group of banks and hopes to sign by mid-October. The sponsor, which operates the Atlantic Star platform, has renewed its contract for the ship with the Brazilian state oil company and renegotiated up its day rates thanks to a limited supply of operating platforms relative to the demand for exploration, thereby boosting the value of the concession. Atlantic Star is the first open syndication to hit the project market in months. One of the last to come was a $230m 7-year for AES Campiche, which was forced to halt syndication in Q2 because of an environmental licensing issue. In the drillship space, Odebrecht is heard close to funding a $1.3bn 10-year project loan. The broadly distributed facility, whose original leads include Santander, SocGen, BNP, Calyon, BES and HSBC, is technically a club, say bankers on it, though it bears many characteristics of a market-driven syndication. “There are still 15 banks very interested in this segment,” says a banker close to one of the transactions. “Nobody has been booking deals this year,” he adds, referring to pent up demand. A deal for Alpha Star is expected in the medium term.