HSBC France and HSBC Egypt have closed a US$100mn reserve-based lending financing facility for PICO Amal Petroleum Corporation in Egypt. HSBC has underwritten the total amount of the facility. Denton Wilde Sapte provided legal counsel for the transaction.
The deal is the first RBL facility to be provided to an independent oil company in Egypt, and will fund PICO Petroleum's exploration and production operations in its Amal oil and gas concession in the Gulf of Suez.
The facility provides a borrowing base model which means that the borrower is entitled to draw down funds for financing the project, subject to the satisfaction of borrowing base model cover ratios.
Lenders have taken securities over any trade receivables under the oil and gas sale agreements (existing and future) concluded by the borrower, including receivables held against the offtaker which buys the entire production from the concession.
The transaction was seen by those working on the deal as particularly complex as it involved having to combine the type of securities and assignment of receivables required by HSBC under French law, such as daily assignment of trade receivables, with what was acceptable to the borrower and the offtaker of the oil and gas volumes produced from the concession.
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