CQS Rig Finance Fund Limited: Monthly Shareholder Fact Sheet
CQS RIG FINANCE FUND LIMITED
Monthly Shareholder Fact Sheet
CQS Rig Finance Fund Limited (the "Company") a closed-ended investment
company incorporated in Guernsey, is pleased to announce that its Monthly
Fact Sheet for May 2010 is now available on the Company's website and
includes information on the top ten investments and outstanding borrowings:
During May, equity, credit and commodity markets were turbulent as questions
over the fiscal viability of the Euro-zone, concerns over the viability of the
economic recovery and the advance of new US financial legislation drove
investors to sell risk assets. The price of WTI crude fell sharply from c. USD
88 per barrel to c. USD 74 at the end of the month after briefly dipping below
the USD 70 mark for the first time since 2009.
In addition to the volatility in the wider markets, the offshore oil & gas
sector was adversely impacted by the increasingly poor news-flow and uncertainty
created by the oil spill from the Macando well in the Gulf of Mexico. Although
the Company does not have any material direct investments in assets operating in
this region, negative sentiment is currently affecting the entire sector.
The US government announced measures including the suspension of current
deep-water drilling projects, a moratorium on new deepwater permits for an
initial period of six months and the cancellation of the Western Gulf of Mexico
lease sale. Significant uncertainties remain both about the length of the
drilling ban and potential regulatory changes that might be announced on the
back of it. We believe this situation is likely to persist for some time to
In light of the events described above, bonds were offered for sale across the
board and all of the Company's investments were marked down, albeit on thin
There were two pieces of news worthwhile highlighting related to the Company's
investments during the month. In its Q1 report Marine Subsea ASA reported that
"the multipurpose/ intervention vessel Sarah was mobilized to West Africa during
the quarter. Sonangol requested that Sarah would start work on a three month
subsea project during Q2 2010; however Marine Subsea cannot provide the services
required by Sonangol before Q4 2010 as we will not have access to critical
subsea equipment. Due to the above situation, Sonangol has so far not paid the
March invoice and Marine Subsea is in discussions with Sonangol about the
payment terms under the back-stop contract."
We are monitoring this situation closely and will report to shareholders on
further developments. Further information can be found at the company's website
In addition, Sevan Marine ASA, on behalf of one of its subsidiaries, has secured
commitments for a USD 525 million senior debt project finance facility for the
Sevan Driller II vessel with ING Bank N.V. as Mandated Lead Arranger. The
facility is structured as a limited recourse construction financing and is fully
underwritten by ING, GIEK/Eksportfinans and Sinosure.
The Company has invested in the bonds secured by the first Sevan drilling unit
and it is encouraging to see availability of bank financing for the second rig.
All market data is sourced from Bloomberg.
For further information, please contact:
Lynette Le Prevost
Kleinwort Benson (Channel Islands) Fund Services Limited
Director, Corporate Finance
020 7012 2000
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Source: CQS Rig Finance Fund Ltd via Thomson Reuters ONE