Norbe VIII and IX Drillship bond, 2010
Project bonds have long been seen as a tool that could
revolutionize infrastructure finance in Latin America, opening
funding possibilities on a scale not possible through bank
lending. And as oil production in Brazil's pre-salt fields
transforms the scale of that industry, drillships will become a
major component of the region's infrastructure build-out. As
the first large issue from a Latin borrower for a drilling rig,
Odebrecht Oil & Gas's $1.5 billion deal sold in November
2010 wins infrastructure deal of the quarter century for paving
the way in the bond market for more such deals. Others, for
floating service vessels, wind farms and toll roads, have
followed in recent years, piggybacking on the broadening of
access for LatAm's corporate issuers.
"The beauty of this bond was that we had already financed
the construction of the vessels through bank lending," Roberto
Ramos, chief executive of OOG, tells LatinFinance.
"And the two drilling rigs were almost ready, allowing us then
to place the bonds and with the proceeds, to pay out the bank
The 10-year bond has an average life of eight years with a
balloon at the end, which means there is an opportunity to
refinance the rigs as the end of the maturity approaches. The
bond was priced at 6.375%.
"We also had a construction guarantee issued by Kexim, which
then added a nice rating to the construction risk," says Ramos.
The two deepwater drillships that were financed - the Norbe
VIII and Norbe IX - were built in Korea for Brazil's
This year, OOG is building two pipe rig support vessels
(PLSVs) in Korea, in a joint venture with Technip. The vessels
again have a long-term contract with Petrobras.
"The construction phase is being financed by bank lending
and export credit agencies, and once they're ready - they'll be
ready mid-to-end of next year - then we'll be looking at
refinancing that through a bond offering," says Ramos.