Borrowings

The movement in bank interest bearing borrowings is as follows:

The Company has no ’off-balance sheet’ financing through special purpose entities. All long-term debt is included in the consolidated statement of financial position.

The additions of US$3,941 million relates mainly to drawdowns on (i) project finance facilities for Liza Unity (FPSO), Prosperity (FPSO) and FPSO Sepetiba, (ii) the senior secured notes issuance on FPSO Cidade de Ilhabela, and (iii) the bridge loan facility for FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão.

The increase in redemptions is mainly due the full repayment of the outstanding debt related to FPSO Cidade de Ilhabela of US$535 million following the issuance of senior secured notes.

On February 11, 2021 the Company issued senior secured notes for the amount of US$850 million. The notes are traded on the Singapore Stock Exchange and are priced at 99.995% of par value with a 5.198% coupon rate which is paid semi-annually. The funding obtained through the issuance was partially used to settle the outstanding project loan which amounted to US535 million at settlement date.

Further disclosures about the fair value measurement are included in note 4.3.28 Financial Instruments − Fair Values and Risk Management.

The borrowings, excluding the amount of transaction and amortized costs, have the following forecast repayment schedule:

The increase of the ‘Total Current portion of Borrowings and lease liabilities’ balance is mainly explained by the addition of the bridge loan facility for FPSO Almirante Tamandaré and FPSO Alexandre de Gusmão, partially offset by the repayment of the FPSO Sepetiba bridge loan facility following the completion of the project financing for this project.

The borrowings by entity are as follows:

Loans and borrowings per entity

• ¹ % interest per annum on the remaining loan balance.
• ² The project finance facility (in 2020) has been replaced by senior secured notes (in 2021) on the Cidade de Ilhabela FPSO.
• ³ The Liza Unity Project finance facility maturity date is August 31, 2022 but can be extended in various ways, and up to the expiry date of the 2 years Charter Term provided that the vessel has been completed.

For the project finance facilities, the respective vessels are mortgaged to the banks or to note holders.

The Company has available borrowing facilities being the (i) undrawn revolving credit facility (RCF), (ii) the undrawn portions of Liza Unity (FPSO), Prosperity (FPSO) and FPSO Sepetiba project facilities and (iii) short-term credit lines.

Expiry date of the undrawn facilities and unused credit lines

The increase in undrawn facilities and unused credit lines compared with the previous year is primary driven by the undrawn facilities on the new project facilities for FPSO Sepetiba and Prosperity (FPSO) completed over the period partially offset by the 2021 drawdowns under the Liza Unity (FPSO) project facility.

The RCF in place as of December 31, 2021 has a maturity date of February 13, 2026, following the exercise of a one-year extension option on February 1, 2021. The US$1 billion facility was secured with a selected group of 11 core relationship banks, increasing to 13 banks in 2021, and has an uncommitted option to increase the RCF by an additional US$500 million. The Company does not have any other extension option remaining.

When needed, the RCF allows the Company to finance EPC activities / working capital, bridge any long-term financing needs, and/or finance general corporate purposes. On December 23, 2021 the RCF was amended by means of an amendment and restatement agreement to reflect a dedicated green funding tranche. By creating this green tranche, US$50 million of the RCF may only be used to fund activities that comply with the Green Loan Principles (primarily activities related to renewable energy projects) and the remaining US$950 million can be used in the following proportions:

• EPC activities / working capital – 100% of the facility;
• General Corporate Purposes – up to 50% of the facility;
• Refinancing project debt – 100% of the facility but limited to a period of 18 months

The pricing of the RCF is currently based on LIBOR, and it includes provisions for the replacement of LIBOR with a compounded reference rate. The margin is adjusted in accordance with the applicable leverage ratio ranging from a minimum level of 0.50% p.a. (0.40% for the green tranche) to a maximum of 1.50% p.a. (1.40% for the green tranche). The margin also includes a Sustainability Adjustment Mechanism whereby the margin may increase or decrease by 0.05% based on the absolute change in the Company performance as measured and reported by Sustainalytics¹. The Company’s Sustainability performance in 2021 allows the 0.05% margin decrease to remain applicable for 2022.