Aker BP’s long-term interest-bearing debt consists of a Reserve Based Lending (“RBL”) facility, a revolving credit facility (“RCF”) and the DETNOR02 and DETNOR03 bonds.
The RBL is a USD 4.0 billion, seven-year facility from 2014 with a bank consortium consisting of 20 banks. The RBL facility is secured by a security package consisting of a pledge over the Company’s interests in development and production licenses in Norway. The loan carries an interest of LIBOR plus a margin of 2.75 percent per annum, plus a utilization fee of 0.25 or 0.50 percent, depending on the amount drawn under the facility.
The available amount under the USD 4.0 billion RBL facility is determined twice a year from the value of the Company’s borrowing base assets based on certain assumptions. There is also an uncommitted accordion option of USD 1 billion that, with the consent from the lenders and subject to certain conditions, can be added to the facility.
Financial covenants under the RBL facility include, inter alia, a leverage ratio covenant (Net debt / EBITDAX below 5.5-6.0x throughout 2019, thereafter 3.5x) and an interest cover ratio (EBITDA / Interest expense above 2.0-2.3x throughout 2019, thereafter 3.5x), as well as short and long-term liquidity tests.
The RCF is a second-lien USD 550 million facility with a tenor of four years from 2015 and a 1+1 year extension option at the lenders’ discretion. The loan carries a margin of 4 percent, stepping up by 0.5 percent after 3, 4 and 5 years, plus a utilization fee of 1.5 percent.
Financial covenants under the RCF facility are harmonized with the RBL as described above with the same restrictions for leverage ratio covenant and interest cover ratio.
The DETNOR02 NOK 1.9 billion unsecured bond loan (ISIN: NO 001 068 4145) was issued in July 2013 and matures in 2020 at a price of 107 as a result of a few amendment processes. The bond originally carried a coupon of 3 months NIBOR + 6.50 percent, but has been swapped to 3 month LIBOR + 6.81 percent. Coupons are payable in quarterly instalments. A NIBOR floor is set at 1%. The bond is listed on the Oslo Børs with ticker “DETNOR02”.
Financial covenants for the bond include, inter alia, a leverage ratio covenant and an interest cover ratio that are harmonized with the RBL as described above.
The loan agreement also includes a negative pledge put option, where bondholders may put the bonds if the company issues new secured non-bank debt, new unsecured pari passu debt with a shorter maturity or issues a convertible loan that is not subordinated to DETNOR02. If such an event occurs, each investor will be able to, but not required to, put their bonds at the company at a price starting at 105% in 2015 and declining by 1% each year. In addition, a put option is offered based on the company’s dividend payments. Each investor can choose to put their pro rata share of the total value of bonds corresponding to the dividend paid by the company at a price of 107 if the leverage ratio is lower or equals 4.5x. If the leverage ratio exceeds 4.5x, each investor has the right to put the entire bond at a price of 107.
DETNOR03 is a USD 300 million subordinated PIK Toggle bond with a fixed rate coupon of 10.25 percent, payable in semi-annual instalments (ISIN: NO 001 073 6382). The bond was issued in May 2015 and matures in 2022. The bonds come with an option to defer interest payments. The bonds are listed on the Oslo Stock Exchange with ticker “DETNOR03”.