Schahin Diversifies With Secured Bond

Brazilian industrial group Schahin is looking to make a grand entrance into the cross border capital markets with a $300m 7-year secured bond. The deal has gotten preliminary investment grade ratings from Fitch and Moody’s, Fernando Schahin, CFO of the group, tells LatinFinance. Nomura, the main bank hired to structure and place the bond, will look to price off the Petrobras yield curve, adds the Brazilian executive. Target investors include insurance companies, financial institutions and other investment grade buyers. Proceeds of the upcoming new issue, which will likely launch later this month or in early March, will help fund Schahin’s equity contribution to an upcoming $1.6 billion 10-year concession with Petrobras to be operated by Schahin’s Black Diamond drillship. Grupo Schahin, whose dealings with the cross border markets have mainly involved raising sizable project loans to finance an offshore drilling unit, says it wants to open a new funding base. “We want to diversify our sources of capital to sustain our growth,” Schahin says. “To do this we are putting our best asset to work,” he adds. “We want to make a statement, here, and have a good deal out in the capital markets.” The asset referred to is Schahin’s Lancer platform, one of the longest-running Petrobras contractor ships. While the ship’s hull was originally built in 1977, the rest of the rig has been regularly modernized and boasts state-of-the-art technology, claims Schahin. It has one of the longest performance records in the industry, no construction risk and its client Petrobras provides a strong contract risk-mitigator. As such, Lancer passes critical tests faced by platforms seeking financing. A newly signed 7-year contract with the state-owned oil company, which includes a day rate of $300,000, provides a strong candidate for a debut debt issue, adds the executive.