Fitch Ratings has affirmed SBM Baleia Azul, SII/ S.a.r.l.'s series 2012-1 senior secured notes due 2027 at 'BB-'.
The Rating Outlook has been revised to Stable from Negative due to Fitch's review of transaction performance amidst vessel shutdown and the alignment of the outlook with the off-taker,
RATING ACTIONS
Entity / Debt
Rating
Prior
SBM Baleia Azul, SII/ S.a.r.l.
Senior L8038*AA4
LT
BB-
Affirmed
BB-
Page
of 1
VIEW ADDITIONAL RATING DETAILS
Transaction Summary
The notes are backed by the flows related to the charter agreement signed with
KEY RATING DRIVERS
Fitch uses the offtaker's IDR as the starting point to determine the appropriate strength of the offtaker's payment obligation. On
STRENGTH OF THE OFFTAKER'S PAYMENT OBLIGATION ALIGNED WITH PETROBRAS' IDR
Fitch's view on the strength of the off-taker's payment obligation acts as the ultimate rating cap to the transaction. Given Fitch's qualitative assessment of asset/contract/operator characteristics and the off-taker's/industry's characteristics related to this transaction, the strength of such payment obligation has been equalized to
EXPERIENCED OPERATOR MITIGATES RISK
TRANSACTION CONTINUES TO MEET PAYMENT OBLIGATIONS AMIDST SHUTDOWN
The company, SBM, has been supporting the transaction structure since vessel shut down in
As a result of the shutdown, the overall uptime average since commercial operations began in 2012 has declined to 91.2%, down from 97.9% prior to the shutdown.
AVAILABLE LIQUIDITY REDUCES RISK
The transaction benefits from a
DSCR CONTINUES TO MEET EXPECTATIONS GIVEN SBM SUPPORT
The key leverage metric for fully amortizing FPSO transactions is the DSCR. The rolling 12-month pre-opex debt service coverage ratio (DSCR) for the period ending
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The rating may be sensitive to changes in
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Fitch does not anticipate developments that could likely trigger an upgrade. However, the main constraint to the transaction's rating is currently the offtaker's credit quality. If upgraded, Fitch will consider whether the strength of the offtaker's payment obligation would be equalized with the entity's IDR.
Best/Worst Case Rating Scenario
International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.
DATA ADEQUACY
The principal sources of information used in the analysis are described in the Applicable Criteria.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
Additional information is available on www.fitchratings.com
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