January 7, 2009
Citibank arranges $850 million drillship financing
Demonstrating that shipbuilding financing can still be arranged if the deal is right, law firm Watson, Farley & Williams reports that it has advised Citibank as a global coordinator, agent and security trustee in connection with a US$850 million pre and post delivery financing for an ice-class drillship. The drillship is to be constructed for the Stena AB Group at Samsung Heavy Industries in Korea.
The financing involved Norwegian and Korean export credit support as well as commercial bank financing.
The financing is the largest ever ship financing supported by the Korea Export Insurance Corporation ("KEIC") to be concluded, the first drillship to be financed by KEIC and the first KEIC financing supported by funding from Norway's Eksportfinans ASA.
This was the fourth in a series of drillships ordered by Stena with financing arranged by Citibank. WFW advised Citibank on each of these deals.
The deal was led by Mike Vernell, partner in the WFW International Shipping Finance Group. He was assisted by solicitor Kavita Shah and trainee Michael Kruger.
Mr. Vernell commented: "This was a complex deal undertaken against the back-drop of the credit crunch and difficult shipping markets. WFW's knowledge of the offshore sector and its understanding of the problems confronting banks in the current economic environment meant we were well placed to advise Citibank and the other lenders on this significant and complex deal".