By Reshmi Basu
New York, July 14 - Petroleum Export Ltd. priced a three-tranche offering of $1.554 billion in senior secured notes, according to a market source.
The deal is comprised of three classes: $400 million of class A1 notes (Aaa/AAA), $250 million of class A2 notes (Aaa/AAA) and $904 million of class A3 notes (Baa1/BBB).
The class A1 and class A2 notes will carry an average life of 2.8 years. The class A3 notes will carry an average life of 3.9 years.
The class A1 notes due June 15, 2010 priced at 99.999 to yield Treasuries plus 75 basis points, coming in line of price guidance.
The class A2 notes due June 15, 2010 priced at 99.999 to yield Treasuries plus 76 basis points, pricing one basis point wider that price guidance of 75 basis points more than Treasuries.
The class A3 notes due June 15, 2011 priced at 99.999 to yield Treasuries plus 140 basis points, pricing towards the tighter end of guidance. Guidance had been set at 137.5 basis points to 150 basis points more than Treasuries.
The deal is structured as the monetization of prepaid forward sales between Egyptian General Petroleum Corp. and Morgan Stanley Capital Group.
Petroleum Export, a Cayman Islands special-purpose vehicle, will enter an agreement with Morgan Stanley Capital for the length of the transaction. Each month, Morgan Stanley Capital will pay a preset price for the delivery of crude and naphtha from Petroleum Export. The amount paid by Morgan Stanley Capital will be enough to pay debt service on the notes.
Parent company Morgan Stanley will guarantee obligations under the purchase agreement.
MBIA Insurance Corp. will guarantee the class A1 notes and XL Capital Assurance Inc. will guarantee the class A2 notes.
Morgan Stanley was the global coordinator for the Rule 144A/Regulation S offering. BNP Paribas and Merrill Lynch were joint bookrunners.
| Issuer: | Petroleum Export Ltd. (Cayman SPV)
|
| Total Amount: | $1.554 billion
|
| Structure: | Monetization of prepaid forward sale between Egyptian General Petroleum Corp. and Morgan Stanley Capital Group
|
| Issue: | Senior secured notes
|
| Pricing date: | July 14
|
| Settlement date: | July 20
|
| Global coordinator: | Morgan Stanley
|
| Joint bookrunners: | BNP Paribas, Merrill Lynch
|
|
|
| Class A1
|
| Amount: | $400 million
|
| Maturity: | June 15, 2010
|
| Average life: | 2.8 years
|
| Coupon: | 4.623%
|
| Price: | 99.999
|
| Yield: | 4.621%
|
| Spread: | 75 basis points more than Treasuries |
|
| Make-whole call: | Treasuries at 25 basis points
|
| Ratings: | Moody's: Aaa
|
| Standard & Poor's: AAA
|
| Class A2
|
| Amount: | $250 million
|
| Maturity: | June 15, 2010
|
| Average life: | 2.8 years
|
| Coupon: | 4.633%
|
| Price: | 99.999
|
| Yield: | 4.631%
|
| Spread: | 76 basis points more than Treasuries |
|
| Make-whole call: | Treasuries at 25 basis points
|
| Ratings: | Moody's: Aaa
|
| Standard & Poor's: AAA
|
| Class A3
|
| Amount: | $904 million
|
| Maturity: | June 15, 2011
|
| Average life: | 3.9 years
|
| Coupon: | 5.265%
|
| Price: | 99.999
|
| Yield: | 5.263%
|
| Spread: | 140 basis points more than Treasuries |
|
| Make-whole call: | Treasuries at 50 basis points
|
| Ratings: | Moody's: Baa1
|
| Standard & Poor's: BBB
|
|
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