Tengizchevroil Finance Company International, a subsidiary of Tengizchevroil (TCO), raised $5 billion through an unregistered offering of senior secured bonds in the international markets and private loans that mirror the terms of those bonds.
TCO is Kazakhstan’s largest developer, producer and marketer of crude oil, gas and sulfur and is jointly owned by Chevron (50 percent), ExxonMobil (25 percent), KazMunayGas (20 percent), Kazakhstan’s state oil company, and Lukoil (5 percent).
The financing consists of $1.25 billion of senior secured bonds sold internationally to investors under Rule 144A/Regulation S and the remainder in the form of senior secured pari passu loans provided by partners. The financing had many notable features.
- The bonds were rated investment grade by Moody’s and Standard & Poor’s, piercing the Kazakhstan sovereign ceiling by one notch.
- The $500 million principal amount of bonds due 2025 priced at a yield to maturity of 2.75%, the lowest-ever U.S. dollar yield for any borrower from the region of the Commonwealth of Independent States.
- The $750 million principal amount of bonds due 2030 priced at a yield to maturity of 3.375%, the lowest-ever U.S. dollar yield for any borrower from Kazakhstan.
While working from home, S&C lawyers managed a virtual closing room with 110 documents signed off by five law firms and over a dozen transaction participants spanning Singapore, Almaty, Atyrau, Moscow, London, New York, Houston and San Francisco.
The London-based S&C team advising TCO was led by Stewart Robertson and Jamie Logie (Hong Kong). Bob Risoleo provided assistance on disclosure and opinion matters. Eric Wang and Saul Brander advised on U.S. tax matters and Andrew Thomson advised on U.K. tax matters.
The financing represents the continuation of a long-term relationship between S&C and TCO. Most recently, we advised on TCO’s $16 billion expansion project financing, named Project Finance International’s
“European Oil & Gas Deal of the Year” in 2016.