Fitch Affirms SBM Baleia Azul, S.a.r.l.'s Sr. Secured Notes at 'BBB'
CHICAGO -- November 5, 2013
Fitch Ratings has affirmed the rating assigned to the senior secured notes
issued by SBM Baleia Azul, S.a.r.l. as follows:
--USD500 million 2012-1 senior secured notes at 'BBB'; Outlook Stable.
The notes are backed by the flows related to the charter agreement signed with
Petroleo Brasileiro S.A. (Petrobras) for the use of the floating production
storage and offloading unit (FPSO) Cidade de Anchieta for a term of 18 years.
SBM do Brasil Ltda. (SBM Brasil), the Brazilian subsidiary of SBM Holding Inc.
S.A. (SBM), is the operator of the FPSO. SBM is the sponsor of the
transaction. The FPSO Cidade de Anchieta began operating at the Baleia Azul
oil field in September 2012.
Fitch's rating addresses timely payment of interest and principal on a
KEY RATING DRIVERS
The rating affirmation reflects the Cidade de Anchieta's uptime performance;
the strong credit quality of SBM; the strength of Petrobras as offtaker; the
liquidity available to the transaction; and the productivity of the FPSO at
the Baleia Azul oil field.
From October 2012 through Sept. 30, 2013, the Cidade de Anchieta registered
99.1% oil uptime, consistent with SBM's excellent record of 99.0% uptime on
its FPSO fleet. During this period, the FPSO's performance achieved the
maximum annual bonus payment under the charter agreement, but suffered some
gas flaring penalties related to gas export shutdown.
The transaction benefits from the experience and strong credit profile of the
sponsor and operator, and their ultimate parent.
Fitch rates Petrobras' local and foreign currency Issuer Default Ratings 'BBB'
with a Stable Outlook. The ratings are supported by the company's leadership
position in the Brazilian domestic energy market, its recognized expertise in
offshore exploration and production (E&P), and its strategic importance to
Additionally, the transaction benefits from a debt service reserve account
(DSRA) equivalent to the following two quarterly payments of principal and
interest. The current balance of the DSRA is $26 million and is composed of a
letter of credit.
In 2013, daily production of the FPSO at the Baleia Azul oil field averaged
approximately 89,000 barrels. The Cidade de Anchieta is capable of processing
a total of 100,000 barrels of oil a day. Given the limited alternative use of
the FPSO, the attractiveness of the oil field to the offtaker is an important
factor in this transaction, as is the credit quality of the parties involved.
The current outstanding balance of the senior secured notes is $483.4 million.
The next amortization payment is scheduled for December 2013 in the amount of
The transaction's rating may be sensitive to movement in the credit quality of
Petrobras as charter offtaker and deterioration of credit quality of SBM as
operator and sponsor. In addition, the transaction's rating is sensitive to
the operating performance of the FPSO Cidade de Anchieta.
Additional information is available at www.fitchratings.com.
Applicable Criteria and Related Research:
--Global Structured Finance Rating Criteria (May 24, 2013);
--Rating Criteria for Infrastructure and Project Finance (July 12, 2012);
--Drilling Rig Financing - Brazil Runs Ultradeep (Sept. 6, 2012).
Applicable Criteria and Related Research:
Drilling Rig Financing -- Brazil Runs Ultradeep (Assessing Risks in a
Developing Asset Class)
Rating Criteria for Infrastructure and Project Finance
Global Structured Finance Rating Criteria
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Fitch Ratings, Inc.
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Chicago, IL 60602
Elizabeth Fogerty, New York, +1 212-908-0526
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