Yinson prices $1.46bn bond issue to refinance offshore oil vessel in Angola

Yinson Production has priced senior secured bonds with a face value of $1.458bn to refinance debt on its Agogo floating production, storage and offloading (FPSO) vessel offshore Angola, in what it described as the largest FPSO project bond issued to date and the first outside Brazil.

The Singapore-based offshore energy company, part of Malaysia’s Yinson Holdings (Bursa Malaysia: YINSON), announced the transaction on October 7 through Yinson Azalea Production Pte Ltd, which owns the vessel operating in Angola’s offshore Block 15/06.

The bonds were priced at 98.164% of their $1.458bn face value, generating approximately $1.43bn in gross proceeds before fees. The fully amortising notes carry a fixed annual coupon of 6.517%, payable semi-annually, and have a scheduled maturity of 13.3 years.

The proceeds will be used to repay existing Agogo project debt, fund reserve accounts, cover transaction costs and make equity distributions from any excess, the company said. Yinson secured up to $1.3bn in financing from 13 lenders in 2024 but has not disclosed the outstanding balance or how much of the new proceeds will be allocated to each purpose. The bond issue therefore represents a refinancing rather than $1.46bn in new investment in the vessel.

Settlement is expected on October 21, with admission sought to the London Stock Exchange’s International Securities Market under the Bloomberg ticker YPAGAO. Fitch assigned the bonds an expected BBB+ rating, while Moody’s assigned an expected Baa2 rating, both investment grade.

Yinson Production chief financial officer Markus Wenker said institutional investors had strongly supported the offering, the company’s third FPSO project bond in three years.

“The transaction demonstrates the availability of long-term capital to the FPSO industry, reinforces the merits of the lease-and-operate model, and further strengthens Yinson Production’s capital structure,” Wenker said.

The Agogo FPSO operates under a 15-year charter with Azule Energy Angola, part of Azule Energy, a joint venture between BP (LSE: BP.; NYSE: BP) and Italy’s Eni (BIT: ENI; NYSE: E). The agreement includes extension options of up to five years, providing a long-term revenue stream supporting the refinancing.

The vessel, which began production in July 2025, has capacity to produce 120,000 barrels per day (bpd) and store 1.6mn barrels. Azule said on October 5 that it had reached its highest production rate since start-up following the connection of additional wells, although it did not disclose the output figure.

Agogo forms part of the wider Agogo Integrated West Hub development, which includes the Ndungu field. The two fields have estimated combined reserves of 450mn barrels and are expected to reach peak production of about 175,000 bpd using two FPSOs.

The refinancing comes as Angola seeks to sustain offshore production amid declining output from mature fields. The country’s petroleum regulator projected more than $70bn in oil and gas investment over five years at an industry conference in September, alongside new deepwater exploration agreements.

See IntelliNews: Angola projects more than $70bn oil and gas investment as majors sign deepwater deals