FPSO Anna Nery; Source: Yinson

Yinson Production refinances FPSO working on Petrobras’ revitalization project with 18.2-year bond

Yinson Production, a subsidiary of Kuala Lumpur-based energy infrastructure and technology company Yinson Holdings, has placed $1.035 billion senior secured notes to refinance a floating, production, storage, and offloading (FPSO) vessel working on Petrobras’ revitalization project in Campos Basin offshore Brazil.

FPSO Anna Nery; Source: Yinson

The pricing of $1.035 million 144A/Reg S non-recourse, senior secured notes were issued by Yinson Boronia Production, which owns and operates the FPSO Anna Nery for Petrobras under a 25-year contract off the coast of Brazil. The FPSO, which has worked for the Brazilian state-owned energy giant since May 2023, is the first unit on the Marlim and Voador revitalization project.

Yinson Production has a 75% stake with Sumitomo Corporation holding the remaining 25% of the shares in Yinson Boronia Production. With a maturity of 18.2 years, the notes were priced at a fixed coupon of 8.947%, payable semi-annually starting on July 31, 2024. Moody’s and Fitch assigned the notes credit ratings of Ba1 and BB+, respectively. The payment and settlement for the notes are scheduled to take place on June 4, 2024.

Markus Wenker, CFO of Yinson Production, commented: “The refinancing of FPSO Anna Nery is another step in diversifying our funding base and optimising our capital structure to support further growth and drive long-term value for Yinson Production. At the same time, investors in the notes enjoy upside potential through the uncapped investment grade structure of the notes, whilst the strong credit fundamentals of FPSO Anna Nery provide downside protection.”

According to the company, the proceeds of the notes will be used to refinance the existing outstanding debt of the FPSO Anna Nery maturing in 2026, unwind hedge arrangements, fund reserve accounts as applicable, pay for transaction-related fees and expenses, and distributions to the two shareholders.

Kazuki Yamaguchi, Sumitomo Corporations’ General Manager of Maritime Energy Solution Strategic Business Unit, remarked: “This achievement will strengthen our confidence that our JV partnership with Yinson Production through the FPSO Anna Nery will strengthen the market potential for providing Brazil’s local economy and opportunities worldwide with such lease and operate asset service businesses, which contributes to the stability and security of the energy supply.”

The FPSO Anna Nery is the first of two FPSOs for the Marlim and Voador revitalization project, which is expected to expand the oil and gas production to more than 150,000 boepd and contribute to the overall boost in the Campos Basin production.

Together with the second production unit for the project, the FPSO Anita Garibaldi, the FPSO Anna Nery will extend production from the field’s deposits until 2048. The FPSO pair will be connected to 75 wells, replacing the previous nine platforms: P-18, P-19, P-20, P-26, P-32, P-33, P-35, P-37 and P-47.

Recently, another one of Yinson Production’s FPSOs arrived in Brazil, where anchoring operations are ongoing to enable the unit to work at Enauta’s oil field in the Santos Basin.