PF Archive

Barzan Gas: Liquidity in an illiquid market

13 12 2011

Normal 0 false false false EN-GB JA X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:Times;} Despite perceived illiquidity in the international bank market, Qatar Petroleum (QP) and ExxonMobil, along with financial advisor Royal Bank of Scotland, have reached financial close on the $10.3 billion Barzan gas project – Qatar’s biggest project financing to date. The $7.25 billion debt facilities closed with a major oversubscription and a highly competitively priced mix of long term ECA and commercial bank debt: Margins range between 130bp over Libor and 200bp over the 16 year term. The project is now fully funded on a 70/30 debt-to-equity ratio and plans for a complementary bond deal have been put on hold until the bond market becomes more competitive. The project documentation contains provisions for a bond, which can thus be launched at relatively short notice to get the best pricing. The financing pulled in $4.9...