UAE’s Etisalat raises $1.2bn via bond issuance

By Ashika Rajan, Trainee Reporter
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UAE-based multinational telecom services operator Etisalat announced that it raised $1.21 billion through the issuance of new euro-denominated bonds.

Etisalat said in a statement to the Abu Dhabi Securities Exchange (ADX) that it had issued $607 million in seven-year bonds and $607 million in 12-year bonds under its current $10 billion Euro Medium Term Note program. According to the statement, the proceeds will be used to repay a 1.4 billion bond that matures in June.

Etisalat stated that “the issuance of the bonds was completed after conducting roadshows with international investors on 4 and 5 May.”

It also stated that the dual-tranche issue was more than six times oversubscribed. The seven-year tranche has a 0.4 percent annual interest rate, while the 12-year tranche has a 1 percent coupon rate.

According to reports, the bond issue’s global coordinators were HSBC, BNP Paribas, First Abu Dhabi Bank, and Societe Generale.

Etisalat reported a 3.8 percent increase in net profit to $2.4 billion last year, despite a small drop in revenue, after raising its foreign ownership cap from 20 percent to 49 percent in January to draw more external investors.

The telecoms operator, which has 149 million subscribers in 16 countries across the Middle East, Africa, and Asia, was established more than four decades ago. The Emirates Investment Authority owns 60 percent of the company, while the rest is floated on the ADX.

Companies and governments all over the region have taken advantage of record-low interest rates to secure low-cost debt funding.

According to Refinitiv’s Mena Investment Banking review, debt issuance from the Middle East and North Africa (MENA) increased by 61 percent to $34.8 billion in the first quarter of this year, the largest sum in a single quarter since records began in 1980.

Abu Dhabi National Energy Company, or TAQA, raised $1.5 billion in a dual-tranche bond issue earlier this month to fund low-carbon growth plans and buy back some of its outstanding corporate bonds.

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