‘Largest ever Nordic bond’ enables Yinson Production to raise nearly $3 billion in 2024

On a mission to bankroll the upgrade of its floating, production, storage, and offloading (FPSO) units, Yinson Production, a subsidiary of Kuala Lumpur-based energy infrastructure and technology company Yinson Holdings, has placed a $100 million tap issue, bringing the total amount of the corporate bond to $600 million.

According to Yinson Production, the proceeds from the $100 million on its outstanding five-year senior secured corporate bond, which has now reached $600 million thanks to the $500 million one originally issued in April 2024, will be used to finance capital expenditures for the upgrade of the firm’s FPSOs. The company’s corporate bond will be listed on Euronext Oslo Børs.

“The tap issue was substantially oversubscribed, reflecting strong investor confidence in our business and vision, and we are grateful to our investors for their continued trust and support. We also thank DNB Markets and Pareto Securities for acting as joint bookrunners, and ABG Sundal Collier for serving as Joint Lead Manager on this successful transaction,” highlighted the Malaysian player.

DNB Markets, which acted as joint bookrunner in connection with the tap issue, underlines that the offering generated strong interest from fixed-income investors globally with the transaction being multiple times oversubscribed and priced at 103.5% of par. Therefore, DNB Markets claims that the tap issue enables Yinson Production to have the single largest outstanding unrated bond in the Nordic bond market.

Commenting on the latest financial milestone, Markus Wenker, CFO of Yinson Production, described the tap issues as “the largest ever Nordic bond by an Asian issuer,” adding: “Including this $100 million bond issue, we have raised close to $3 billion this year alone.”

The company’s current fleet of nine units operates in Latin America, West Africa, and Southeast Asia, with a combined revenue backlog of $21.9 billion through 2048. The Malaysian firm aims to reduce its carbon intensity by 30% by the end of the decade, but Offshore Energy has not been able to gain further insight into the nature of the FPSO upgrades for which the latest funding is designated.

However, Wenker did confirm the money will primarily be used for the FPSO Abigail-Joseph, with further light to be shed on the expected upgrades once the agreement with the charterer of the FPSO is finalized.

After First E&P inked a deal for FPSO deployment at the Anyala – Madu field development project within OMLs 83 and 85 offshore Nigeria with the Malaysian player in 2019, the unit was upgraded in Singapore before achieving its first oil in 2020.

The FPSO comes with a storage capacity of 870,000 barrels, an oil processing capacity of 50,000 barrels per day, and a gas handling capacity of 39 million standard cubic feet per day. The original contract for the FPSO is firm for seven years with multi-year extension options, enabling it to be prolonged until 2035.

As part of its sustainability enhancement mission, Yinson Production is incorporating zero-emission FPSO technologies into its newbuilt FPSO design, as illustrated by the piloting of post-combustion carbon capture technology onboard FPSO Agogo. In addition, the company is also retrofitting existing units when possible and making use of the digitalization of asset lifecycle management to improve operational efficiency.

Yinson is determined to cut its emissions across scopes 1, 2, and 3 through internal optimization, adoption of innovative emission-reducing technologies, and the use of renewable energy where possible. Given its decarbonization agenda, the firm is keen on exploring carbon removal opportunities and the utilization of carbon compensation mechanisms.

The Malaysian player’s renewable energy pipeline is also growing, as demonstrated by 557 MW installed capacity, 540 MW capacity under construction, and 365 GWh of renewable energy generated this year. As part and parcel of its climate aspirations to be carbon neutral by 2030 and net zero by 2050, the company is looking into the development of nature-based solutions projects in Malaysia.

Recently, Yinson Production completed the sale of a minority stake in an FPSO working on Petrobras’ revitalization project in Campos Basin offshore Brazil. As a result, Japan’s shipping player, Kawasaki Kisen Kaisha (K Line), has become the firm’s new partner.