Njord Gas Infrastructure AS (“NGI” or the “Company”) announces a plan for re-profiling of all outstanding bonds with extension of maturities and amendment of amortization schedules to better align the debt service with cash flows from operations.
In June 2013, the Ministry of Petroleum and Energy announced changes to the Tariff Regulation (“Tariff Amendment”) for the Gassled pipeline system (“Gassled”) where the capital element of the Gassled tariff was reduced by 90% for a majority of the tariff areas for capacity booked after 1 July 2013 for use after 1 October 2016. The implications for the Company will increase over time as new bookings at the lower tariff start to account for a higher portion of the Revenue basis.
NGI financed its investment in Gassled by four senior secured term loans; a USD 265 million 5.1000% nominal interest loan, a GBP 165 million 5.2410% nominal interest loan, a NOK 550 million 6.1525% nominal interest loan and a NOK 300 million 4.3000% CPI index linked loan. The three nominal loans are swapped to achieve a 100% NOK index linked debt exposure to match the cash flows from operation.
The bonds were rated A- at issuance and have been downgraded to a current BB- rating following the Tariff Amendment. As the cash flows from operation have been reduced as a consequence of the Tariff Amendment, NGI forecasts a shortfall in cash flows from operations relative to its debt service in the period from 2021 to 2027.
The Company proposes a plan for re-profiling of the outstanding bonds by extending the final maturity by one year to September 2028 and amend amortization schedules to better align the debt service with cash flows from operations. Notional outstanding and coupon rates will remain unchanged. The Company has entered into overlay swaps to match the bond amendments. Bondholders representing more than 2/3 in each of the bond tranches have given their irrevocable undertaking to vote in favour of the proposal on bondholders meetings expected to be held on or about 1 July 2016. For further details on the transaction, please refer to Company presentation dated 16 June 2016 attached hereto.
Arctic Securities AS and Bluecore Advisors Ltd have been acting as financial advisors to the Company. Advokatfirmaet Selmer DA has been acting as legal advisor to the Company.
Dated: 16 June 2016
Njord Gas Infrastructure AS
The information in this announcement is subject to the disclosure requirements of the Norwegian Securities Trading Act section 5-12 and/or the Oslo Børs – Continuing Obligations.
Njord Gas Infrastructure AS is headquartered in Stavanger, Norway. It invests in Norwegian gas infrastructure and currently holds an 8.036% participating interest in Gassled. For more information, please refer to http://njordgasinfra.no/.
For information, please contact:
Birte Norheim, CEO
+47 9529 3321