UPDATE 2-Abu Dhabi's TAQA to raise $2 bln from bond

Wed Dec 5, 2012 8:19am EST

Related Topics

* Demand for TAQA bond strong, order books over $10 bln

* Co to raise $750 mln 2018 bond at UST+200 bps

* $1.25 bln 2023 bond launched at UST+210 bps

By Stanley Carvalho

ABU DHABI, Dec 5 (Reuters) - Abu Dhabi National Energy Co (TAQA), the state-owned firm buying some of BP's North Sea assets, will raise $2 billion from its two-part bond, amid strong demand for the deal.

Proceeds from the bond sale are to be used for refinancing debt that is coming to maturity, a source familiar with the matter said on Wednesday, declining to be identified.

The company has $1.75 billion in bond maturities next year. It last tapped markets for a dollar-denominated issue last December with a $1.5 billion two-tranche bond to refinance 2012 maturities.

Global demand for top-rated Gulf debt is currently very strong and spreads have tightened significantly to attractive levels for state-linked borrowers such as TAQA and International Petroleum Investment Co (IPIC). IPIC raised $2.9 billion from a bond sale last month.

TAQA, over 70 percent-owned by the Abu Dhabi government, launched a $750 million bond maturing 2018 at a spread of 200 basis points over U. S. Treasuries and a $1.25 billion bond maturing 2023 at 210 basis points over U. S. Treasuries.

Final pricing at launch was slightly tighter than guidance issued earlier in the day, indicating strong investor appetite.

Regional traders said there was substantial demand for TAQA's new issue, with order books seen in excess of $10 billion at 1000 GMT, and the bonds already trading higher in the grey market.

"We are still in the process of book building. We have seen strong demand and expect to finalise the transaction late Wednesday or by Thursday," a spokesman for TAQA told Reuters earlier in the day.

BNP Paribas, Citigroup Inc, HSBC Holdings, National Bank of Abu Dhabi and Standard Chartered Plc are mandated bookrunners on the deal.

TAQA is the second Gulf borrower to issue bonds this week, after Gulf International Bank priced a $500 million five-year deal on Tuesday, as regional companies line up to get deals away before investors close books for the year.

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