Yinson Production, a subsidiary of Yinson Holdings Berhad based in Kuala Lumpur, has successfully secured $1.458 billion through the issuance of project financing bonds for FPSO (Floating Production, Storage and Offloading) projects. This marks a new advancement in the industry as it is the first time such a project has been financed outside Brazil.
Details of Yinson Production's Financing
The bonds for the FPSO Agogo project, which is leased to Azule Energy and operates in Block 15/06 in deepwater Angola, have been issued under lease terms for 15 years with options to extend for up to five years. These bonds are fully redeemable with a fixed maturity date of 13.3 years, carrying a fixed interest rate of 6.517% per annum.
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Yinson Production's CFO, Markus Wenker, stated, "We are very pleased with the strong support from institutional investors for this offering, which is our third FPSO project bond in three years and has set a new record as the largest FPSO project bond to date."
Implications for Capital Markets and Credit
Yinson Production's advancements in financing demonstrate the availability of long-term capital for the FPSO industry and strengthen the leasing and operating model. These bonds are particularly well-regarded due to the strong credit of the FPSO Agogo project and its strategic importance to the lessee. Credit rating agencies such as Fitch and Moody's have assigned credit ratings of BBB+ and Baa2 to these bonds.
Notably, previous FPSO projects, including prior financings by Yinson Production, were associated with assets operating in Brazilian waters. Thus, this move by Yinson Production represents a geographical milestone for the FPSO asset class.
Wenker emphasized, "In addition to the size of this transaction, what distinguishes this project is that it is the first FPSO project bond outside Brazil, which helps expand and diversify the investable universe for investors."
The settlement date for these bonds is set for October 21, 2026, and applications for acceptance in international markets have been submitted to the London Stock Exchange. These actions allow investors to access infrastructure assets with predictable cash flows and strong counterparties.
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