Singapore’s Yinson Production, a subsidiary of Kuala Lumpur-based energy infrastructure and technology company Yinson, has locked in a $1.458 billion senior secured notes offering, setting a new benchmark for the floating production, storage, and offloading (FPSO) sector.
The pricing of $1.458 billion in 144A/RegS senior secured notes by Yinson Azalea Production marks the industry's first-ever FPSO project bond issued outside of Brazil, broadening the global infrastructure asset class for institutional investors as the company refinances its FPSO Agogo, which is leased to Azule Energy and operates in block 15/06 offshore Angola under a 15-year firm, plus extension options for up to five years, bareboat charter.
Markus Wenker, Yinson Production’s Chief Financial Officer, commented: “We are very pleased with the strong support from institutional investors for this offering, which is our third FPSO project bond in three years and sets a new benchmark as the largest FPSO project bond to date.
“It also represents an important milestone for the asset class as a whole, as this is the first FPSO project bond outside Brazil, broadening and diversifying the investable universe for investors seeking exposure to infrastructure assets backed by highly visible cash flows and strong counterparties.”
Yinson Production explains that the notes are fully amortizing with a scheduled maturity of 13.3 years and were priced at 98.164% of their principal amount with a fixed coupon of 6.517% p.a., payable semi-annually.
The proceeds from the transaction will be used to, amongst other things, refinance the existing outstanding debt related to the FPSO, fund reserve accounts as required under the new bond issue, unless funded by a reserve account facility, pay for transaction-related fees and expenses, and for equity distributions from excess proceeds.
The notes are expected to settle on October 21, 2026, and an application has been made for the admission to trading on the London Stock Exchange’s International Securities Market with Bloomberg ticker symbol YPAGAO.
Fitch and Moody’s have assigned expected credit ratings of BBB+ and Baa2, respectively, to the notes, reflecting the strong credit fundamentals of the FPSO Agogo, its strategic importance to the charterer, and the critical role of FPSOs in the offshore oil and gas value chain more broadly.
“The transaction demonstrates the availability of long-term capital to the FPSO industry, reinforces the merits of the lease-and-operate model, and further strengthens Yinson Production’s capital structure,” added Wenker.
The previous mega-scale FPSO project bonds, including Yinson Production's own prior issuances, such as the one for the FPSO Maria Quitéria, were tied to assets operating in Brazilian waters, while the FPSO Agogo operates offshore Angola, making this a geographic milestone for the asset class.
Wenker emphasized: “Beyond the size of the transaction, what really makes this one stand out is that it is the first FPSO project bond outside Brazil, broadening and diversifying the investable universe for investors seeking exposure to FPSOs in the public markets.”