Schahin Reworks Rig Loan, Eyes New Jumbo

Construction delays on a drill ship in Asia are forcing Brazil’s Grupo Schahin to renegotiate an $800m 10-year Petrobras vessel project loan. This may impact Schahin’s ability to raise funds for a new set of oil platforms, say bankers. The loan being reworked was launched mid-2007 at 237.5bp over Libor during the 3-year construction period and 162.5bp-200.0bp in the 7-year post construction period. New pricing and final maturity are still being worked out, say people close to the transaction. An executive close to the sponsor says there is nothing alarming about the delays at Yantai Raffles shipyard, which are always expected with large projects, and that Petrobras is aware of the potential delay to construction of the rig, called Black Gold. But bankers watching the deal worry that postponement will cost the sponsor, as additional expenses eat into its ability to extend a larger equity contribution for an upcoming deal. Schahin is planning an estimated $1.3bn 10-year project loan for 2 new twin platforms, to be called Black Diamond. A Schahin executive dismisses concerns as unfounded speculation and sees no reason to be concerned about either transaction. “The shipyard is always a critical component of these deals,” says a syndicator, echoing remarks by other project bankers. Bankers allege that China-based Yantai Raffles has little experience in building this specific type of Petrobras vessel. Appetite for fresh Schahin risk will be gauged by the performance of Odebrecht’s syndication for a nearly identical project – twin platforms with a debt component of $1.3bn. Odebrecht’s facility offers 340bp in year one and steps up to 415bp over Libor. A Schahin deal would likely have to start at around 400bp, says a banker with knowledge of the credit. Schahin hopes it can put together long term financing for Black Diamond by year-end. Bankers on the deal are skeptical that such a timeline is achievable. Standard Chartered, Unicredit, WestLB and Mizuho signed agreements wi