6.3.24Loans and Borrowings

Bank interest-bearing loans and other borrowings

The movement in the bank interest bearing loans and other borrowings is as follows:

31 December 2015

31 December 2014

Non-current portion

4,332

3,205

Add: current portion

895

403

Remaining principal at beginning of period

5,227

3,608

Additions

2,013

2,517

Redemptions

(1,411)

(878)

Transaction and amortised costs

(95)

(19)

Other movements/deconsolidation

(12)

-

Movements during the period

495

1,620

Remaining principal at end of period

5,722

5,227

Less: Current portion

(763)

(895)

Non-current portion

4,959

4,332

Transaction and amortised costs

158

64

Remaining principal at end of period (excluding transaction and amortised costs)

5,880

5,291

Less: Current portion

(784)

(907)

Non-current portion

5,096

4,384

The Company has no ‘off-balance sheet’ financing through special purpose entities. All long term debt is included in the consolidated statement of financial position.    

Further disclosures about the fair value measurement are included in Note 6.3.29 ‘Financial Instruments – Fair values and risk management’.

The bank interest-bearing loans and other borrowings, excluding transaction costs and amortised costs, have the following forecasted repayment schedule, amounting to US$ 158 million (2014: US$ 64 million):

31 December 2015

31 December 2014

Within one year

784

907

Between 1 and 2 years

503

733

Between 2 and 5 years

1,553

1,325

More than 5 years

3,041

2,326

Balance at 31 December

5,880

5,291

The bank interest-bearing loans and other borrowings by entity are as follows:

Loans and borrowings per entity

Net book value at 31 December 2015

Net book value at 31 December 2014

Entity name

Project name or nature of loan

% Ownership

% Interest 1

Maturity

Non-current

Current

Total

Non-current

Current

Total

US$ Project Finance facilities drawn:

Aseng Production Company Ltd

FPSO Aseng

60.00

15-Dec-15

-

-

-

-

121

121

SBM Espirito do Mar BV

FPSO Capixaba

100.00

2.84%

15-Jun-16

0

31

31

31

60

90

Brazilian Deepwater Prod. Ltd

FPSO Espirito Santo

51.00

5.01%

30-Jun-16

-

42

42

42

63

105

SBM Deep Panuke SA

MOPU Deep Panuke

100.00

3.80%

15-Dec-21

324

58

382

383

57

440

Tupi Nordeste Sarl

FPSO Cidade de Paraty

50.50

5.22%

15-Jun-23

714

87

801

801

82

883

Guara Norte Sarl

FPSO Cidade de Ilhabela

62.25

5.52%

15-Oct-24

1,005

98

1,103

1,103

78

1,181

SBM Baleia Azul Sarl

FPSO Cidade de Anchieta

100.00

5.89%

15-Sep-27

396

26

423

423

25

448

US$ Guaranted project finance facilities drawn:

Alfa Lula Alto Sarl

FPSO Cidade de Marica

56.00

5.01%

15-Dec-30

1,161

17

1,178

968

(5)

963

Beta Lula Central Sarl

FPSO Cidade de Saquarema

56.00

4.03%

15-Jun-30

1,290

47

1,337

-

-

-

SBM Turritella LLC

FPSO Turritella

55.00

3.66%

31-Dec-26

-

-

-

-

-

-

Bilateral credit facilities:

SBM Holding Inc.SA

FPSO Cidade de Saquarema

100.00

Variable

17-Dec-162

-

-

-

303

0

303

Revolving credit facility:

SBM Offshore Finance Sarl

Corporate Facility

100.00

Variable

30-Jan-222

(3)

(1)

(4)

-

-

-

Single Buoy Moorings Inc

Corporate Facility

100.00

Variable

30-Jan-222

-

-

-

152

(1)

151

Other:

Other

100.00

72

356

429

126

417

543

Net book value of loans and borrowings

4,959

763

5,722

4,332

895

5,227

  • 1 % interest per annum on the remaining loan balance
  • 2 additional year(s) extension option considered

Annual interest rates include the interest rate impact of hedging financial derivatives. The ‘Other debt’ mainly includes loans received from partners in subsidiaries.

For the project finance facilities, the respective vessels are mortgaged to the banks or to note holders. Interest expense on long term debt during 2015 amounted to US$ 184 million (2014: US$ 146 million) and interest capitalized amounted to US$ 48 million (2014 : US$ 54 million). The average cost of debt was 4.0% in 2015 (2014: 4.2%).

The Company has available short term credit lines and borrowing facilities resulting from the undrawn part of the Revolving Credit Facility (RCF) and the undrawn part of project facilities. The expiry date of the undrawn facilities and unused credit lines are:

Expiry date of the undrawn facilities and unused credit lines

2015

2014

Expiring within one year

100

77

Expiring beyond one year

2,166

1,535

Total

2,266

1,612

The Revolving Credit Facility (RCF) was renewed on 16 December 2014 and will mature on 16 December 2020 with one additional one-year extension option remaining. The US$ 1 billion facility was secured with a select group of 13 core relationship banks and replaces the existing facility of US$ 750 million that was due to expire in mid-2015. The RCF can be increased by US$ 250 million on three occasions up to a total amount of US$ 1,250 million, subject to the approval of the existing lenders. The RCF commercial conditions remain based on LIBOR and a Margin adjusted in accordance with the applicable Leverage Ratio ranging from a bottom level of 0.50% p.a. to a maximum of 1.20% p.a.

Covenants

The following key financial covenants apply to the RCF as agreed with the respective lenders, and, unless stated otherwise, relate to the SBM Offshore N.V. consolidated financial statements:

  • Solvency ratio: Tangible Net Worth divided by Total Tangible Assets > 25%
  • Leverage Ratio: Consolidated Net Borrowings divided by adjusted EBITDA < 3.75. At the request of the Company the leverage ratio may be replaced by the Operating Net Leverage ratio which is defined as Consolidated Net Operating Borrowings divided by adjusted EBITDA < 2.75. This only applies to the period starting from 30 June 2015 to 30 June 2016
  • Interest Cover Ratio: Adjusted EBITDA divided by Net Interest Payable > 5.0

For the purpose of covenants calculations, the following simplified definitions apply:

  • Tangible Net Worth: Total Equity (including non-controlling interests) of the Company in accordance with IFRS
  • Total Tangible Assets: SBM Offshore N.V.’s total assets (excluding intangible assets) in accordance with IFRS Consolidated Statement of Financial position less the mark to market valuation of currency and interest derivatives undertaken for hedging purposes by SBM Offshore N.V. through Other Comprehensive Income
  • Adjusted EBITDA: Consolidated earnings before interest, tax and depreciation of assets and impairments of SBM Offshore N.V. in accordance with IFRS except for all lease and operate joint ventures being then proportionally consolidated, adjusted for any exceptional or extraordinary items, and by adding back the capital portion of any finance lease received by SBM Offshore N.V. during the period
  • Consolidated Net Borrowings: Outstanding principal amount of any moneys borrowed or element of indebtedness aggregated on a proportional basis for the Company’s share of interest less the consolidated cash and cash equivalents available
  • Consolidated Net Operating Borrowings: Consolidated Net Borrowings adjusted by deducting the moneys borrowed or any element of indebtedness allocated to any project during its construction on a proportional basis for the Company’s share of interest
  • Net Interest Payable: All interest and other financing charges paid up, payable (other than capitalized interest during a construction period and interest paid or payable between wholly owned members of SBM Offshore N.V.) by SBM Offshore N.V. less all interest and other financing charges received or receivable by SBM Offshore N.V., as per IFRS and on a proportional basis for the Company’s share of interests in all lease and operate joint ventures

Covenants

2015

2014

Tangible Net Worth

3,637

3,441

Total Tangible Assets

11,274

11,058

Solvency Ratio

32.3%

31.1%

Consolidated Net Borrowings

3,194

3,245

Adjusted EBITDA (SBM Offshore N.V. )

863

1,270

Leverage Ratio

3.70

2.56

Net Interest Payable

121

90

Interest Cover Ratio

7.10

14.06

None of the loans and borrowings in the statement of financial position were in default as at the reporting date or at any time during the year. During 2015 and 2014 there were no breaches of the loan arrangement terms and hence no default needed to be remedied, or the terms of the loan arrangement renegotiated, before the financial statements were authorized for issue.