Abu Dhabi National Energy Company (TAQA) has raised $1.5 billion through a dual-tranche bond issue to fund its low-carbon growth plans and buy back some of its outstanding corporate bonds.
The company raised debt through two $750 million tranches. A seven-year note maturing in April 2028, has an interest rate of 2 percent, the lowest TAQA has achieved on its bond sales. A longer 30-year tranche has a coupon rate of 3.4 percent, matures in April 2051. The 30-year tranche is TAQA’s first Formosa issuance dual-listed in Taipei and London to tap into Taiwanese demand.
The order book for the bond issuance was four times oversubscribed with strong demand from Asian investors, allowing the company to achieve significantly lower interest costs than on existing debt. The final order book of $ 6.1 billion allowed the company to achieve significantly lower interest costs than on existing TAQA bonds. The company said part of the net proceeds from the deal will be used for the repayment of its outstanding debt.
The issuance was arranged and offered through a syndicate of joint lead managers and bookrunners, including 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, while the buyback of the 2023 Notes continues as of the date of this release. The buybacks were arranged by BNP Paribas, HSBC, MUFG and SMBC Nikko acting as joint dealer managers.
“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.”
TAQA’s Group Chief Financial Officer, Stephen Ridlington, said that the company 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.”