Financing a long-term future
for Songa Offshore

A senior secured loan worth USD 1.1 billion for Norway’s Songa Offshore is helping to provide the rig company with long-term certainty in a market hit by falling crude oil prices. Stavanger-based Songa Offshore will use the facility to finance two new semi-submersible drilling rigs for the Norwegian Continental Shelf. The new rigs were developed in conjunction with Statoil itself, which will use them under eight-year fixed contracts, with options for four additional three-year periods.

Songa Offshore already operates three rigs with the Norwegian oil company and is in the process of expanding its fleet with four state-of-the-art rigs tailor-made for Statoil contracts. It already had financing for the first two rigs and approached NIBC and other banks to finance the third and fourth rigs.

"NIBC quickly saw the merits of the transaction and understood what we wanted to do."

Jan Rune Steinsland

“This was an important transaction for us. It means we now have financing for all the rigs under construction in our new-build programme, which will help us to serve Statoil as a long-term client,” says Jan Rune Steinsland, Songa Offshore’s Chief Financial Officer. This will give Songa Offshore a competitive edge and help it grow in a tough market, he adds.

NIBC acted as mandated lead arranger and underwriter along with ABN AMRO, ING and Swedbank. We played a key role in securing participation from a further seven commercial banks during syndication, which was substantially oversubscribed. Steinsland points to NIBC’s entrepreneurial mindset and our ability to think – and move ‒ fast.

Jan Rune Steinsland, Songa Offshore

“Although we had not worked with NIBC before, they quickly saw the merits of the transaction and understood what we wanted to do,” says Steinsland. “We met the NIBC team several times and a relationship developed quickly, which was essential for the transaction. They worked with us to find the most suitable financing solution for these new-builds. NIBC’s proposal with the other banks was the most appealing and showed the depth of its sector knowledge.”

He was particularly impressed by our contribution during the syndication phase. “NIBC proved to have very good placing power, which was instrumental to the successful syndication of the underwritten facility.” Seven commercial banks joined the facility in addition to the four underwriters and the Norwegian Export Credit Agency. The new rigs are being constructed at the DSME yard in South Korea and are due for delivery in 2015.