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ELNG 2: Looking to Henry
01 July 2005
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[project financing]
[projectfinance]
Financing for Egyptian LNG Train 2 (ELNG 2) was always going to be notable if only for its size. But the deal is a radical departure from the template set by ELNG 1 – ELNG 2 lenders are taking Henry Hub price risk without a floor and the financial engineering has more in common with the BTC pipeline financing in 2004 than ELNG 1.
The $880 million deal signed on 5 July 2005 in London, pulling in 22 international and four Egyptian lenders. Gearing is 80/20 and average debt service cover ratio around 2x.
The international facilities comprise three 12-year tranches: a commercial tranche of $411.2 million, and two EIB facilities each totalling $144.4 million, comprising an Article 18 guarantee facility and a Euromed guarantee facility. An Egyptian facility of $180 million was also provided.
The commercial bank facility is priced at 60bp over Euribor pre-completion,...
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