Taqa Plans Bond Sale of at least $1 Billion

ABU DHABI - Abu Dhabi National Energy Co, or Taqa, has started investor meetings to raise at least $1 billion in bonds to finance investments and repay debt due next year, a company executive said on Tuesday.

By (Reuters)

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Published: Wed 15 Jul 2009, 2:15 AM

Last updated: Sun 5 Apr 2015, 9:39 PM

Taqa is 75 per cent owned by the government of Abu Dhabi and is one of the vehicles the emirate uses to invest oil money. The company had started a roadshow which had been received “very well”, the executive said.

Taqa, which has about $3 billion in cash and cash equivalents, aims to transform itself into an integrated international Energy company after starting out in 2005 as an Abu Dhabi utility.“We have commitments for $1 billion so far, so at least we are looking to cover this much,” he told Reuters, declining to be identified as the sale has not been completed.

State and corporate issuers in the world’s largest oil exporting region have raised more than $15 billion by issuing bonds over the last four months.

The bonds are the latest from Abu Dhabi following issues from Aldar Properties, investment vehicle Mubadala and most recently a $1 billion sale from the Tourism Investment & Development Co. Many are eyeing further sales as demand rises for high-rate emerging market debt and governments look to boost infrastructure spending to shelter the region’s economy from the global financial crisis.

Taqa has already invested $1.5 billion this year and is looking to spend another $1.5 billion over the next six to nine months as the global economic downturn and financial crisis offers more opportunities to buy assets.

“We have a credit facility less than $1 billion due next year and the bonds are to cover that facility,” the executive said. “One of the purposes is also for investments and acquisitions.”

Taqa has about $3 billion in cash and cash equivalents, he added.

BNP Paribas is one of the banks arranging the sale, the executive said.

“The final amount will be decided through a book building process and the coupon price will be determined at the end,” he said, adding the deal would close soon. The utility signed in August a $3.15 billion three-year revolving credit to refinance existing debt.

Taqa aims to transform itself into an integrated international energy company after starting out in 2005 as an Abu Dhabi utility.

It plans to almost triple assets to $60 billion by the end of 2012 from around $23 billion it held late last year.

The UAE is the world’s third-largest oil exporter. Taqa ended its relationship with Standard & Poor’s Ratings Services earlier this month after the ratings agency placed it on a negative credit watch.

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