Schahin Set for Drillship Bond

Brazil’s Schahin Petroleo e Gas has given 6.0%-area guidance on a $730m bond, expected to price today.The transaction was heard getting around $1bn in demand as of Tuesday afternoon. The BBB minus/Baa3 bond features a 7.5-year average life, with an expected maturity of 2022 and legal maturity of 2023. Proceeds would help refinance a bridge loan for the Sertao ultra-deepwater drillship.The transaction is backed by flows from Sertao’s 10-year service contract with Petrobras, and follows a roadshow that ended Tuesday. Morgan Stanley, Nomura, Deutsche Bank and Mizuho are managing the sale, done through the Schahin II Finance Company special purpose vehicle. Sertao is currently making its way to Brazil from Korea, and is expected to be operational in 3 months.