In July 2020, GasLog executed not just one of the shipping industry’s most significant and complex refinancing projects that year, but the largest such deal the firm had ever undertaken.
The company replaced two existing secured syndicated facility agreements – covering 13 of its liquefied natural gas (LNG) vessels – with three fresh deals of the same type, plus one secured bilateral facility agreement. Three of the four new facilities closed simultaneously, with the bilateral facility closing two weeks later.
With a total value of more than $1.13bn, the refinancing spanned four tranches, divided between the main company GasLog Ltd (GLOG) and its spinoff GasLog Partners LP (GLOP), which acquires and operates the firm’s LNG carriers. Loan values were agreed at $260m and $200m on the GLOP side, plus $577m and $97.5m on the GLOG side – with the latter falling into the bilateral category.
Overall, the transaction was designed to refinance GasLog’s 2021 debt maturities one year ahead of schedule, providing the firm with $30m of liquidity while reducing its cost base.
The deal was completed on a compressed timetable, despite multiple parties across the world being constrained by local COVID-19 restrictions.
The deal was made even more complex by the need for simultaneous closure of three of the new facilities – a challenge that required considerable coordination across time zones and jurisdictions between a large number of incoming and outgoing banks, third-party charterers and the Ship Registry.
“The timing was well judged, the collaboration impressive and the overall execution superb.”
Deal highlights
Providers to GLOP: BNP Paribas, Credit Suisse, Alpha Bank and the Development Bank of Japan plus the London branches of DNB ASA and ING Bank.
Providers to GLOG: Citibank NA, ABN AMRO, Nordea Bank, HSBC, Crédit Agricole Corporate and Investment Bank, UniCredit Bank and National Australia Bank. The National Bank of Greece.
Structure: Multi-jurisdictional refinancing at an aggregate value of $1,134,718,750, divided into $577m, $97.5m, $260m and $200m tranches.
Completed last September, the retailer’s refinancing of its £3bn revolving credit facility (RCF) into a new, £2.5bn RCF broke new ground as the first-ever syndicated, day-one SONIA- and SOFR-based facility, with the pricing mechanism of the new £2.5bn facility intrinsically tied to the retailer’s sustainability goals.
With market participants at different stages of LIBOR-transition readiness, the transaction was completed within a six-week time frame. A successful syndication provided each lender with significant scale-back from their initial commitments. Judges were impressed with the deal’s forward-thinking SONIA and SOFR approach and its environmental, social and governance components.