Höegh LNG Nets USD 223 Mln to Finance New FSRU

  • Business & Finance

Oslo-listed owner and operator of floating LNG import terminals, Höegh LNG Holdings, has received commitment letters for a USD 223 million bank financing for FSRU#7, scheduled for delivery by the end of the first quarter of 2017, the company said.

The financing is available to fund 65% of the delivered cost with a fifteen year amortization profile increasing to 75% and twenty years, respectively, upon securing a long term contract.

The structure has a five year post-delivery tenor and the flexibility of being dropped down to Höegh LNG Partners LP together with the FSRU. The interest rate will be swapped and is expected to be fixed at around 3.8%.

“With this transaction, Höegh LNG has once again secured competitive debt financing for its FSRU fleet expansion, and this time at the lowest cost ever achieved by the company. The financing terms reflect the financial strength of Höegh LNG’s balance sheet in addition to its position as the market leader in the FSRU segment,” says Sveinung J.S. Støhle, President & CEO of Höegh LNG.

The commitments are subject to final documentation.

The announcement comes on the back of the company’s reported results for the fourth quarter of 2015.

Namely, Höegh LNG reported EBITDA of USD 24.6 million in the fourth quarter of 2015, compared to USD 26.6  million in the previous quarter. The company’s profit after tax was USD 33 million after a USD 37 million impairment of FLNG investments. In addition, the company decided to put FLNG activities on hold and allocate its FLNG resources to the FSRU segment.

“The stable EBITDA is a result of the company’s strong operating performance, currently with five FSRUs in operations world-wide,” Støhle said, adding that the company sees “very favourable market conditions for the FSRU segment, driven by ample LNG supplies and low LNG prices, which is why Höegh LNG will focus on its objective of reaching 12 FSRUs by 2019.” 

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