Odebrecht Sounds Jumbo Platform

Brazil’s Odebrecht is in the market with financing for platforms costing $1.35bn in total. It is heard seeking MLAs for $100m tickets to build a $860m commercial bank syndicate on a 12-year deal. Pricing during the sounding process is heard at 250bp over Libor for the 1-2-year construction period, 275bp for years 3-6, 300bp for years 7-10 and 325bp for years 11-12. An MLA fee of approximately 200bp is being offered, according to bankers familiar with the terms. There is also a $220m ECA tranche. Proceeds will be used to build 2 oil platforms, ODN 1 and ODN 2. BNP and HSBC are heard leading the process. “Pricing is getting aggressively lower in Brazil but it seems expensive compared to where Petroserv, who is a proven operator, is coming,” says a New York-based banker familiar with the transaction. Petroserv is said to be shopping a $460m facility for a $720m project. A price of Libor+290bp is rumored on the 6-year and Itau is understood to be holding $230m of the total. The deals mark an uptick in Brazil platform funding activity. Quiroz Galvao is heard looking to mandate a $700m+ 10-year deal for Alpha Star, which would also include ECAs, say bankers. A spread in the low 200s is rumored. This competing supply could affect participation in Odebrecht, as some portfolios could hit exposure limits, according to the New York-based banker. He adds that some lenders could may also have issues with the 20%-30% balloon structure. However, he says the facility may still be attractive from a relationship standpoint. “The size of the conglomerate means banks will participate because of the other opportunities it could offer,” he tells LatinFinance. “This is very much a relationship deal, which is what makes it appealing.”