Tight credit markets have forced Dutch Liquefied Natural Gas (LNG), a gas pipe expansion project in Maasvlakte, to borrow money from the European Investment Bank (EIB) and a commercial banking syndicate at double the interest rates paid on its original loan a year ago.
LNG borrowed €136 million in total for expansion, but two of its original funders – BNP Paribas and BBVA – refused to lend to the project.
The EIB stepped in, lending €51 million over 20 years. A syndicate of ING, DnB NOR Bank, Rabobank, Svenska Handelsbanken, Bayern and Calyon lent between €2 million and €20 million apiece.
But even with multilateral backing the debt was expensive: 225 basis points (2.25 percentage points) over Eurobor during construction, rising in stages to 270bp, according to Project Finance. Margins on the original €243 million loan were just 80 basis points (bp), rising to 110bp.