Export Credit Norway and various banks will provide the necessary loan financing, while a consortium of guarantors will issue EUR 554 million (NOK 5.2 billion) in loan guarantees. The Norwegian Export Credit Guarantee Agency (GIEK) will act as principal guarantor.
The framework agreements secure predictable financing for Saipem’s purchases of Norwegian goods and services until the end of 2017. Purchases made in 2014 and 2015 are also included.
Saipem, which was recently spun out of the energy company ENI, is a supplier of drilling, engineering and construction services, primarily to the subsea sector. The company also provides engineering, procurement, construction and installation (EPCI) services for pipelines and complex offshore and onshore projects. It specialises in deepwater and other challenging field developments.
Ninety percent of the loan capital under the new agreements will be guaranteed by GIEK, with Export Credit Norway and Citi acting as the primary lenders. Citi has also arranged the framework agreements on Saipem’s behalf.
“The market situation for the Norwegian supplier industry remains extremely challenging. Export credit guarantees from GIEK are helping to bring Norwegian suppliers, foreign purchasers and private and public capital together, and thereby facilitating vital exports. There is market demand for such framework agreements, which also serve GIEK’s social mandate,” says GIEK CEO Wenche Nistad.
“Saipem is a large international buyer of Norwegian subsea technology, and is focused on technology quality and reliable delivery. In addtion, we offer competitive financing. This agreement is a good example of how Norwegian exporters can use the export credit scheme to their advantage,” says Export Credit Norway’s acting CEO, Olav E. Rygg.
“Lending to international oil service companies has been restricted in response to reduced credit ratings following the oil price collapse. In these circumstances, GIEK’s loan guarantees and Export Credit Norway’s loan capital have become even more important for these companies,” conclude Rygg and Nystad.