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KrisEnergy upsizes debut SGD bonds
Independent upstream oil and gas company KrisEnergy on June 2 priced its inaugural Singapore dollar bond issue amounting to S$130 million (US$104 million), which garnered strong demand from private banking accounts and institutional investors. The three-year deal, which bears a fixed interest rate of 6.25%,
Chito Santiago 4 Jun 2014

Independent upstream oil and gas company KrisEnergy on June 2 priced its inaugural Singapore dollar bond issue amounting to S$130 million (US$104 million), which garnered strong demand from private banking accounts and institutional investors.

 

The three-year deal, which bears a fixed interest rate of 6.25%, was upsized from the initial amount of S$100 million after it attracted an order book of almost S$800 million. It was drawn from the company's S$500 million multi-currency medium-term note (MTN) programme established on May 26 this year.

 

KrisEnergy CEO Keith Cameron described the investor support as a testament to the robustness of the company's portfolio and its business strategy as well as to its conservative financing approach. He says the net proceeds will be used for the development of the two oil projects in the Gulf of Thailand, which are both scheduled to commence production in 2015, and for acquisitions in its continued push to grow KrisEnergy's portfolio.

 

HSBC and Standard Chartered were joint arrangers of the MTN programme. Standard Chartered was the sole active bookrunner for the bond issue, while HSBC acted as passive bookrunner.

 

Rob Mason, global co-head of high yield debt capital markets at Standard Chartered, said in a statement the transaction was a landmark deal as KrisEnergy is the only oil and gas exploration and production company to access the Singapore dollar market in at least the past five years, if not the first. The offering also diversifies the company's funding base and positions it very well for the next phase of its development.

 

In March this year, KrisEnergy secured a US$100 million revolving credit facility that matures in March 2016, arranged by HSBC, with an option to extend for an additional one year. The facility will be used for the acquisition of hydrocarbon assets, general corporate purposes and for working capital requirements.

 

Its new bond issue comes as the company on January 30 this year fully redeemed the outstanding principal amount of US$120 million worth of bonds at 105.25% of the principal amount, together with the total amount of accrued interest.

 

The Singapore-listed KrisEnergy is focussed on the exploration for, and the development and production of oil and gas in Southeast Asia. Since 2009, it has built a portfolio of 18 contract areas in Bangladesh, Cambodia, Indonesia, Thailand and Vietnam, spanning the entire exploration-to-production life cycle. The company operates 11 of the contract areas.

 

In the first quarter of 2014, its working interest production was about 8,000 barrels of oil equivalent per day from two oil and gas licenses in the Gulf of Thailand and one gas field in onshore Bangladesh.

 

 

 

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