Dolphin (51 per cent owned by Mubadala Development Company with the remaining equity split equally between Total and Occidental Petroleum Corporation) secured financing commitments in April of $3.0 billion from 25 financial institutions. These commitments comprised $2.6 billion from local, regional and international financial institutions participating in the commercial bank facility and $400 million in export credit financing insured bytheItalian Export Credit agency SACE.
In late July, Dolphin priced its debut project bond issue which generated a strong investor demand globally, with an order book of $4.7 billion. Dolphin raised $1.25 billion from the bond market which has allowed a scale back of the commercial bank and SACE facilities to $1.4 billion and $218 million respectively. Additionally, Total and Oxy are co-lending approximately $1.2 billion to the project.
All of the debt facilities are fully amortizing over 10 years, and the total debt package is $4.1 billion.
Commenting on the response from both the bank and bond markets, Dolphin Energy’s Chief Executive Officer, Ahmed Ali Al Sayegh, said, “We have attracted an impressive list of financial institutions and debt capital market investors. They recognize the tremendous potential in this unique regional energy initiative.”
“Strong fundamentals – a robust business plan, a solid long-term customer base, strong and committed shareholders and a highly experienced management team – ensure our business model is attractive to local, regional and international debt investors. We are delighted with the response.
“This is our third financing since we embarked on the project. Securing this institutional support means that with the support of our shareholders Mubadala, Total and Oxy, Dolphin will continue to make a significant contribution to the UAE and Oman’s gas requirements and create wealth, employment and growth opportunities for the citizens of the GCC.”
As majority shareholder, Mubadala played an instrumental role on behalf of Dolphin to secure financing. Derek Rozycki, Mubadala’s Executive Director - Project and Corporate Finance, said, “To have secured the Dolphin refinancing in these challenging market conditions demonstrates Dolphin’s strength of ownership and an appetite in the capital markets for issuers from the Gulf region. The attractive pricing combined with Dolphin’s credit quality has resulted in the overwhelming success.”
The total amount raised through the refinancing will be used to repay the $3.45 billion loan secured in 2005, provide 70% of the construction costs of the 240km Taweelah-Fujairah pipeline and pay for the financing fees related to the refinancing. The debt-equity ratio is less than 70:30.
The margin on the commercial bank facility starts at 275 bps over Libor for the first three years, rising to 300bps for the next three years and then 350bps for the rest of the period. The SACE facility pays a margin over Libor of 175 bps, while the bond pays a coupon of 5.888 per cent.
The commercial bank facility, Sponsors’ co-loans and the bond have received a rating of Aa3/Stable by Moody’s. Fitch has issued an A+/Stable rating for the bond.
Dolphin’s Financial Advisor is The Royal Bank of Scotland plc (RBS). The bond Joint Lead Managers are RBS, BNP Paribas, Abu Dhabi Commercial Bank and National Bank of Abu Dhabi. The bond Co-Managers are Calyon, Société Générale, The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Mandated Lead Arrangers for the commercial bank facility are: Abu Dhabi Commercial Bank, BayernLB, BNP Paribas, Calyon, Export Development Canada, First Gulf Bank, National Bank of Abu Dhabi, Samba Financial Group, Société Générale, Sumitomo Mitsui Banking Corporation Europe Limited, The Bank of Tokyo-Mitsubishi UFJ, Ltd., RBS, WestLB AG, Arab Bank plc, Arab Banking Corporation B.S.C., Crédit Industriel et Commercial CIC S.A., Europe Arab Bank plc, HSBC Bank plc, KBC Bank NV, Lloyds TSB Bank plc, National Australia Bank Limited, Natixis, Standard Chartered, The Commercial Bank of Qatar and Union National Bank.