Hoegh LNG Secures Financing for FSRU#8

Hoegh LNG said July 24 it has received commitment letters for a $230mn debt financing for its eighth floating storage and regasification unit (FSRU #8).

It comprises a 12 year export credit agency (ECA) term loan of up to $150mn backed by Garantiinstituttet for Eksportkreditt (GIEK) and Eksportkreditt of Norway, and a 5 year non-amortising commercial bank loan of up to $80mn funded by Dutch bank ABN Amro and three Scandinavian banks: Danske Bank, Nordea and Swedbank. 

The facility is available to fund 65% of the delivered cost of the FSRU with no employment requirement, increasing to 75% upon securing long-term employment, said Hoegh. The interest rate will be swapped from floating to fixed, and at the current market conditions the fixed interest rate is expected to come in at around 4.1%; the facility is subject to final documentation.

Hoegh LNG CEO Sveinung JS Stohle said: "With this transaction, Höegh LNG is executing on its financial strategy of diversifying funding sources, while obtaining a flexible and competitive debt financing structure that supports the company's growth strategy. The favourable financing terms reflects Höegh LNG's strong balance sheet and track-record in securing and operating long-term FSRU contracts."

Bermuda-registered but Norway-based Hoegh LNG said at 1Q results in May that it has six FSRUs in operation, plus three under construction. It has been chosen to provide FSRUs for projects in Pakistan and Ghana, and recently signed an agreement to explore possible collaboration with Qatari shipowner Nakilat.

Mark Smedley