Finance News

Milbank Advises on $175 Million Financing of Two Brazilian Oil Tankers

MilbankFirm represents Teekay Shuttle Tanker Finance LLC in issuing 10-year senior secured notes for delivery of a pair of identical tankers built in Korea to work Brazil’s  offshore oil fields

In its latest major transaction in the service of Brazil’s  burgeoning offshore energy sector, Milbank, Tweed, Hadley & McCloy has advised Teekay Shuttle Tanker Finance LLC, as issuer, in the $174,150,000 financing of two Suezmax-class shuttle tankers designed to operate between Brazil’s  offshore oil fields and coastal refineries and terminals.

The bond financing is to be split into two equal tranches and funded through two issuances the first taking place this month, the second scheduled for November, prior to the delivery of each tanker.  Proceeds from the secured 10-year notes will be used to fund delivery of the two vessels.

The two tankers are being built by Samsung Heavy Industries Co. Ltd. of South Korea and will be under 10-year charter to BG in Brazil.  Each identical tanker, Bossa Nova Spirit and Sertanejo Spirit, is 282 meters in length and with a capacity of 167,500 cubic meters.

Teekay Shuttle Tanker Finance LLC is a wholly owned subsidiary of Teekay Offshore Partners LP, one of the world’s leading owners and operators of shuttle tankers, which since the 1970s has provided an alternative to conventional pipelines for transferring oil from offshore to storage or refining facilities. Shuttle tanker technology permits their operation in deep water and harsh or remote locations, which has earned them the moniker “floating pipelines.”

Project Finance partner Daniel Bartfeld, who co-led Milbank’s  team, says that the successful notes offering for the two shuttle tankers marks a significant milestone and is noteworthy for its multi-vessel and multi-issuance structure, which we believe is a first in this industry.  We’re very pleased to have led in this private placement for Teekay.”

Co-lead partner Jay Grushkin, a member of Milbank’s Structured Finance group, added, This is yet another example of the willingness and appetite of the traditional private placement market to fund non-traditional assets.”

Also working on the transaction were Milbank associates Caroline Conway, Sean O’Neill and Mikhel Schecter.


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