Yesterday evening, the partners in the "Tamar" gas field offshore from Israel reported that they had reached agreement with a consortium of banks on finance for development of the field. The consortium of eleven local and foreign banks, among them Barclays and HSBC, will provide finance totaling $900 million. Delek Drilling LP (TASE: DEDR.L) received a limited recourse loan of $400 million; Avner Oil and Gas LP (TASE: AVNR.L) received a similar sum; and Dor Gas received $102 million. Some $190 million of the loans will serve to repay the bridging loan granted to the project in June 2010.
The loans are for eight years, but the period could shorten under a cash sweep mechanism whereby 25% of the free cash flow from the project will be used to accelerate repayment of the loans.
The loan is denominated in US dollars, It bears an interest rate based on three-month LIBOR plus an annual margin varying according to the stages of the project. From the signing of the agreement until completion of the project as defined in the agreement, the margin will be 4.75%. For two years from that date, the margin will be 4.25%. For the next two years, the margin will be 4.75%, and thereafter, until full repayment is made, the margin will be 5.5%. The drilling partnerships will also pay a $13 million fee for each of the loan periods. Repayment is scheduled to begin on January 31, 2014, and to be made in 26 quarterly payments, but the partnerships can repay al part of the loans at any time.
Published by Globes [online], Israel business news - www.globes-online.com - on April 22, 2012
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