Middle East Economic Survey
VOL. LIV
No 48
28-Nov-2011
UAE
TAQA’s $9Bn Note Program Secures A- Rating From S&P
Standard & Poor’s Ratings Services said on 24 November it assigned an A- long-term debt rating to Abu Dhabi National Energy Company’s (TAQA’s) proposed $9bn medium term note (MTN) program. The program, which ranks pari passuwith all of TAQA’s other outstanding senior unsecured debt, should allow the company to raise funds to pay down existing debt and can also be used for other general corporate purposes. For example, TAQA is looking to refinance its bond maturity of about Dh5bn ($1.5bn) due in October 2012, taking advantage of the current low interest rate environment. The current rating on TAQA factors in a small benchmark issuance under the program in the last quarter of 2011. S&P said it rates the MTN program one notch below TAQA’s corporate credit rating, to reflect its likely structural subordination to senior secured debt held by lenders to TAQA’s power and water project-financed assets. They would be expected to benefit from better recovery prospects. On a consolidated basis, S&P calculates the ratio of TAQA’s secured debt to assets at about 40% as of 31 December 2010. On a proportional consolidated basis, the same ratio stood at about 30%, according to TAQA’s financial statements for 2010, said S&P.
Copyright MEES 2011.
