Petroleum Export to issue three tranches of notes backed by forward sales

By Reshmi Basu

New York, July 5 - Special-purpose vehicle Petroleum Export Ltd. plans to issue $1.5 billion senior secured notes in a three-class offering, according to a market source.

The deal will be structured as the monetization of prepaid forward sales between Egyptian General Petroleum Corp. and Morgan Stanley Capital Group.

The 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 a fixed amount of crude and naphtha from Petroleum Export. If there is a shortfall in one product, Egyptian General will make it up by delivering an equivalent value of the other. 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.

The deal will be comprised of three classes: $500 million of class A1 notes (Aaa/AAA), $250 million of class A2 notes (Aaa/AAA) and $800 million of class A3 notes (Baa1/BBB).

The class A1 and class A3 notes will carry an average life of 3.6 years and a maturity of 5.9 years. The class A2 notes will carry an average life of 2.8 years and a maturity of 4.9 years.

MBIA Insurance Corp. will guarantee the class A1 notes and XL Capital Assurance Inc. will guarantee the class A2 notes.

Morgan Stanley is the global coordinator for the Rule 144A/Regulation S offering. BNP Paribas and Merrill Lynch are joint bookrunners.

A European roadshow is scheduled to run Thursday through Monday while the U.S. leg will take place on the following Tuesday through Friday, July 12-July 15.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.