Mitsu E&S Holdings subsidiary Modec has raised $1.1 bn in a project bond issue in Singapore.
The funds will be used to refinance the floating production storage and offloading (FPSO) vessel Cidade de Mangaratiba MV24 (built 2014) which is on charter to Petrobras.
The FPSO is operating in Iracema Sul in Brazil’s pre-salt region and has a production capacity of 150,000 barrels a day. It is currently producing around 4% of Brazil’s oil production.
The vessel is owned by a consortium made up of Modec, trading houses Mitsui & Co and Marubeni and Japanese shipping company Mitsui OSK Lines and financed in Japan.
Modec said the project bond was heavily oversubscribed and was taken up by mainly by European and US investors.
The project bond carries an annual interest rate of 6.7% and will expire in 2034 when the charter runs out.
Modec, a Japanese specialist offshore construction, leasing and operating company, is currently operating 11 FPSOs and has another four under construction.
Modec said it used the project bond to diversify its funding sources.
The company said it hopes to use similar financing to fund its expansion plans. “ With diverse means of financing, which can be applied to both existing and new charter projects, Modec is able to respond more flexibly to the recent burgeoning demand for FPSOs and thus establish a robust position in the FPSO industry,” Modec said.
