OSX Nears Finish Line

Five banks are heard signing up for OSX’s $850m loan to finance the construction of a floating production storage and offloading (FPSO) vessel OSX-2 in Singapore. The transaction is expected to close in October and is being led by ING, Itau and Santander. The loan has a 12-year final maturity with a 7-year average life, offering a margin L+425bp pre-construction and +410bp thereafter. Including the bookrunners, the deal now has 8 banks in total. This comes despite difficulties earlier this year when some banks were heard giving the transaction a wide berth amid euro-zone worries and higher funding costs. Bankers also expressed concerns over how the company, controlled by Brazilian magnate Eike Batista, lacked a track record. Against this backdrop, leads were forced to flex pricing up to L+425bp from 375bp pre-construction and to +400bp from 360bp thereafter.