The Nigerian National Petroleum Corporation (NNPC) on Thursday announced that it has obtained a prepayment funding of about $1 billion to support the upstream operations of its subsidiary, Nigerian Petroleum Development Company (NPDC).
It said the crude oil prepayment had enabled NNPC to pay NPDC’s tax obligations to the Federal Government of about $700m with the balance utilised to fund NPDC’s capital and operating expenditures.
NNPC said in a statement issued by is spokesperson, Kennie Obateru, that the prepayment financing was backed by future oil production of NPDC.
The corporation said the financing utilises a well-established structure to enable the purchaser of the crude, Eagle Export Funding Limited, to raise financing in the domestic and international markets, to fund an upfront payment to NNPC under a Forward Sale Agreement.
“The financing which funded the prepayment has been structured over two tranches, a five-year dollar amortising tranche (Tranche 1) and a seven-year naira amortising tranche (Tranche 2).
“Both tranches benefit from a cash sweep with the seven-year tranche having a one-year non-call period,” it added.
It said the tranches shall be repaid by Eagle Export Funding Limited from the export sale proceeds of the NPDC crude, which in turn were backed by Letters of Credit, issued by banks with a minimum credit rating, in line with market precedent.
