DUBAI: Abu Dhabi National Energy Co (TAQA) is to issue $1.75 billion in bonds split into a $750 million seven-year tranche and a $1 billion 12-year tranche, a document from one of the banks leading the deal showed.
The bond issue, expected to price later on Monday, is the latest sizeable debt sale out of the Gulf, which last week flooded international debt capital markets with about $24 billion in new paper. Saudi Arabia completed an $11 billion deal and Qatar followed with a $12 billion transaction.
TAQA, a state-controlled oil explorer and power supplier, has received orders in excess of $8.25 billion for the planned bonds.
Initial price guidance released earlier on Monday was in the region of 185 basis points (bps) over U.S. Treasuries for the seven-year tranche and about 240 bps over for the 12-year paper.
It was subsequently tightened to final guidance of 165 basis points (bps) over U.S. Treasuries for the seven-year tranche and to 210 bps over the UST benchmark for the 12-year paper. The document said the bonds are expected to price within a 5 bps range above or below those figures.
TAQA will use the bond proceeds to refinance existing debt, a source close to the matter said.
The company borrowed $1.25 billion at the end of last year through a one-year bridging loan provided by a syndicate of six banks.
Proceeds from the bonds are expected to refinance that loan and, potentially, an outstanding $500 million bond due in September, the source said.
Citigroup, First Abu Dhabi Bank, HSBC, ING, Mizuho, Scotiabank and SMBC Nikko are joint lead managers of TAQA's new bonds.
(Reporting by Davide Barbuscia Editing by Louise Heavens and David Goodman) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: email@example.com))