DNO raises $400mn in hybrid bonds to refinance Sval Energi’s debt

Norwegian producer DNO ASA completed an oversubscribed $400mn hybrid bond private placement to support the integration of Sval Energi Group AS.

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DNO ASA, the Norwegian oil and gas operator, has raised $400mn (NOK4.28bn) through a private placement of subordinated hybrid bonds, according to a statement released on June 5. The funding is tied to the upcoming acquisition of Sval Energi Group AS, with closing expected by the end of June.

The issued hybrid bonds will carry a 10.75% coupon rate and will be callable at 100% of nominal value after five and a half years. A coupon step-up is planned after six years, and final maturity is scheduled for 2085. Settlement is expected on or about June 17, subject to customary conditions. An application will be made to list the bonds on the Oslo Stock Exchange.

Strong demand and strategic positioning

The placement attracted significant interest across US, Nordic and international markets, far exceeding the initial volume offered. According to the company, the issuance builds on its “24-year flawless track record” in the bond market, said DNO’s Executive Chairman, Bijan Mossavar-Rahmani.

The company stated that these hybrid bonds will be treated as equity rather than debt on its consolidated balance sheet. This structure, according to DNO, is intended to optimise its financial leverage following the integration of Sval Energi, a key player on the Norwegian Continental Shelf.

Refinancing and use of proceeds

The funds raised will primarily be used to refinance the financial debt of Sval Energi and for general corporate purposes. No further details were provided regarding the total amount of debt to be refinanced.

The transaction was led by Arctic Securities AS, DNB Carnegie, a division of DNB Bank ASA, and Pareto Securities AS acting as joint bookrunners. AGP Advokater AS served as legal advisor to DNO ASA.

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