In a milestone export credit agency-guaranteed maritime bond transaction, Milbank, Tweed, Hadley & McCloy LLP represented J.P. Morgan, as initial purchaser, in the $125 million note offering issued by Seven & Seven Ltd. to help finance a new fleet of eco-product tankers. The five-year bonds are guaranteed by The Export-Import Bank of Korea (“Kexim”).
The transaction marks the first time a Kexim-guaranteed bond offering was structured and marketed exclusively to US investors under Rule 144A and Regulation S. It also represents the first export credit agency-backed bond offering in the world to finance the purchase of shipping vessels. The deal sets an important shipping industry precedent by providing a lower cost-of-funding option for ship owners through Kexim’s guarantee of privately placed bonds in the deep and liquid US bond market and by boosting exports by Korea’s large shipbuilder community.
The offering is the second portion of Kexim’s vessel financing deal totaling $300 million to cover Scorpio Tankers’ purchase of oil carriers from Korea.
Scorpio Tankers Inc., a New York-based provider of marine transportation of petroleum products worldwide, is at the forefront of the eco-ship movement in the global shipping markets. The company is in the process of building out a new fleet of nearly 60 fuel-saving vessels produced by Korean shipyards.
The Milbank team included Global Securities partner Stuart Morrissy and associates Meredith Hines and Theo Hart; Transportation & Space partner Hugh Robertson; and Tax partner Andrew Walker and associate Erika Hauser.
“We are very pleased to have played a key role working with J.P. Morgan as lead purchaser in bringing this noteworthy offering to market,” said Milbank’s Mr. Morrissy. “Scorpio Tankers is at the vanguard of a new generation of ecological ships. It’s exciting to see Kexim participate in the creation of a new guaranteed-bond product and we expect to see other export credit agencies support similar vessel transactions in the future.”
About Milbank
Milbank, Tweed, Hadley & McCloy is a leading international law firm that has been providing innovative legal solutions to clients throughout the world for more than 145 years. Milbank is headquartered in New York and has offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, São Paulo, Singapore, Tokyo and Washington, DC.
The firm’s lawyers provide a full range of legal services to the world’s leading commercial, financial and industrial enterprises, as well as to institutions, individuals and governments. Milbank’s lawyers meet the needs of its clients by offering a highly integrated and collaborative range of services across key practice groups throughout its global network. Milbank’s integrated practice is underpinned by its attorneys’ acknowledged technical excellence, sectorial expertise and a strong tradition of innovation and client service.
