Noble Americas Said to Loan Ecuador State Oil Company $1 BillionKatia Porzecanski, Nathan Gill and Boris Korby
The U.S. unit of Noble Group Ltd. loaned Ecuador’s state oil company $1 billion, then repackaged the debt into securities that it sold to bond investors this month, according to a prospectus for the notes.
The notes were issued through a Cayman Islands-based special purpose entity known as Noble Sovereign Funding I Ltd., according to the document, which was provided to Bloomberg News by a person who asked not to be identified because the offering was private. The securities due 2019 carried an interest rate of 5.63 percentage points above three-month Libor and were sold at 98.1 cents on the dollar, according to data compiled by Bloomberg.
Standard & Poor’s rated the notes B+, four levels below investment grade, saying the transaction relies on cash flows from the government as the guarantor of the underlying loan. The loan was made by Noble Americas Corp., according to the prospectus.
The press offices of PetroEcuador and the Finance Ministry didn’t respond to telephone and e-mail requests for comment on the transaction. Noble didn’t respond to telephone and e-mail messages left for investor relations official Stephen Brown and Joseph Limone, its general counsel for North America.
PetroEcuador, in charge of refining and selling the OPEC nation’s crude, has stepped up fuel imports in the past months as planned maintenance at its Esmeraldas refinery, the nation’s biggest, crimps local fuel supplies. The refinery began partial shutdowns on July 12 and output will be completely halted at the 110,000 barrel-per-day complex in October.
PetroEcuador has awarded Noble Americas at least two fuel-supply contracts in the last year and Noble is a frequent bidder on supply tenders organized by the company.
JPMorgan Chase & Co. helped arrange the loan securitization. Veronica Espinosa, a spokeswoman for the bank, declined to comment.