Yinson Production, a Singapore subsidiary of Kuala Lumpur-based energy infrastructure and technology company Yinson Holdings, has closed a US$1.035 billion offering of non-recourse, senior secured notes.

Citigroup and Santander acted as global coordinators for the offering. HSBC, ING, J.P. Morgan, and Natixis acted as joint bookrunners, while Mizuho, Ramirez & Co., Standard Chartered Bank and Bladex acted as co-managers.

Norton Rose Fulbright and Latham & Watkins acted as legal advisers to the issuer and the initial purchasers, respectively.

The issuer was Yinson Boronia Production, which owns and operates the floating production, storage and offloading vessel FPSO Anna Nery for Petrobras under a 25-year contract in the Marlim oil field offshore Brazil. Yinson Production holds 75% and Sumitomo Corporation holds 25% of the shares in the issuer.

Moody’s and Fitch assigned the notes credit ratings of Ba1 and BB+, respectively, reflecting the strong credit profile of FPSO Anna Nery.

FPSOs are typically financed during the construction period by bank debt. Once in place,  under long-term contracts, the predictable cash flows became suitable for the bond market – depending on where the FPSO is located. Petrobras is a highly favoured name among investors. 

The proceeds of the notes will be used to refinance the existing outstanding debt of FPSO Anna Nery maturing in 2026, unwind hedge arrangements, fund reserve accounts as applicable, pay for related transaction fees and expenses, and for distribution to Yinson Production and Sumitomo Corporation as shareholders of the issuer.

The notes, fully amortizing with a maturity of 18.2 years, were priced at a fixed coupon of 8.947%. The notes were listed on London Stock Exchange’s International Securities Market.

“The refinancing of FPSO Anna Nery is another step in diversifying our funding base and optimizing our capital structure to support further growth and drive long-term value for Yinson Production,” says chief financial officer Markus Wenker. “At the same time, investors in the notes enjoy upside potential through the uncapped investment-grade structure of the notes, while the strong credit fundamentals of FPSO Anna Nery provide downside protection.”

Yinson Production is a leading independent owner and operator of FPSO vessels worldwide. With a fleet of nine vessels, it has an order book of over US$22 billion until 2048, and global presence in 10 countries.