Aker BP’s long-term interest-bearing debt consists of a combination of bank facilities and bonds.
The main bank facility is a Reserve Based Lending (“RBL”) facility of USD 4.0 billion. This is a 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 2-3 percent per annum. Certain fees are also payable, including, but not limited to: (i) a commitment fee on available commitments and (ii) a commission on letters of credit issued. The available amount under the USD 4.0 billion RBL facility is determined annually based on an assessment of 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 4.0x until Johan Sverdrup production start, thereafter 3.5x) and an interest cover ratio (EBITDA / Interest expense above 3.5x), as well as short and long-term liquidity tests.
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 carries a coupon of 3 months NIBOR + 6.50 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”.
In a separate arrangement, Aker BP has swapped the interest of DETNOR02 to 3 month LIBOR + 6.81 percent.
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, plus a negative pledge put option.
Bond agreement: DETNOR02 bond agreement
USD 6% Senior Notes
In July 2017, Aker BP raised USD 400 million by issuing 6% Senior Notes due in 2022 (ISIN: US R01 40A AA71). The coupon is 6.00 percent, payable semi-annually on 1 January and 1 July. Maturity date is 1 July 2022. The Senior Notes are listed on The International Stock Exchange (“TISE”) with ticker “AKERSNTS”.
USD 5.875% Senior Notes
In March 2018, Aker BP raised USD 500 million by issuing 5.875% Senior Notes due in 2025. The coupon is 5.875 percent, payable semi-annually on 31 March and 30 September. Maturity date is 31 March 2025. The Senior Notes will be listed on TISE.
Acquisition bank facility
In connection with the acquisition of Hess Norge, Aker BP on 22 December 2017 established a USD 1.5 billion bank facility with a consortium of five banks. The facility has a duration of 18 months, carries an interest of Libor + 1.5 percent (the margin increases to 2.0 percent after nine months), and is secured by pledge in the shares of Hess Norge AS. Aker BP expects the tax losses from Hess Norge to be settled during 2018. Such settlement would trigger a mandatory repayment of this bank facility.
Aker BP has obtained credit ratings from S&P and Moody’s. S&P has assigned a BB+ long-term corporate credit rating with stable outlook. Moody’s has assigned a Ba1 corporate family rating with stable outlook.
Links to rating reports: