TAQA Group completes US$1.5 bln bond offering

Abu Dhabi National Energy Company (TAQA) announced the successful placement of an aggregate US$1.5 billion in 7-year and 30-year dual-tranche senior unsecured notes.

The 7-year notes, sized at $750 million and maturing April 2028, were issued at a coupon rate of 2.0%. The 30-year notes, also sized at $750 million and maturing April 2051, were issued at a coupon rate of 3.4%. The 30-year tranche is TAQA’s first Formosa issuance dual-listed in Taipei and London to tap into Taiwanese demand.

The order book was four times oversubscribed with strong demand from Asian investors setting the stage for further orders from MENA, Europe and the US. The final order book of $6.1 billion allowed the company to achieve significantly lower interest costs than on existing TAQA bonds. The Notes are rated Aa3 by Moody’s and AA- by Fitch, in line with the corporate credit ratings of the company.

Net proceeds from the sale of the Notes will be used for general corporate purposes, including the repayment of outstanding debt.

The issuance was arranged and offered through a syndicate of joint lead managers and bookrunners comprising of Bank of China, Citi, First Abu Dhabi Bank, HSBC, Mashreq, Mizuho Securities and MUFG.

In addition to the bond issuance, TAQA offered to buy back, for cash, all the $1.5 billion of outstanding corporate bonds maturing in 2021 and up to $250 million of the bonds maturing in January 2023, subject to customary conditions. A total of $712 million of the 2021 Notes were tendered by investors whilst the buy back of the 2023 Notes continues as of the date of this release. The buy backs were arranged by BNP Paribas, HSBC, MUFG and SMBC Nikko acting as joint dealer managers.

Jasim Husain Thabet, TAQA’s Group Chief Executive Officer and Managing Director, commented: “We are delighted with the results of our first funding exercise following the transformational transaction with ADPower last year. The strong demand from global credit markets and investors from around the world is a strong vote of confidence in TAQA’s strengthened financial profile as well as the company’s strategy to become a low carbon power and water champion in the UAE and beyond. I am confident that we will continue to go from strength to strength, demonstrating why TAQA, and the utilities sector in the UAE, is a compelling opportunity for investors.”

Stephen Ridlington, TAQA’s Group Chief Financial Officer, commented: “TAQA is proud to have been able to achieve very competitive funding rates that will help lower our financing costs and support future growth. Achieving negative new issue premiums on both tranches sets a strong tone for the company and lays a solid foundation for future financing opportunities. Moreover, we have set some notable achievements as part of this exercise, namely the lowest coupon achieved by TAQA to date, at 2%. With our long-term growth plans and firm financial stewardship, we remain committed to maintaining strong investment grade credit ratings on a standalone basis.”