Abu Dhabi National Oil Company (Adnoc)'s US$3 billion international bond, the first issued by the oil major and one of the Middle East's largest ever non-sovereign bond offerings, was more than three times oversubscribed, the company said on Monday.
The bond, issued by Adnoc subsidiary Abu Dhabi Crude Oil Pipeline (Adcop), received more than $11bn in orders, driven by "strong demand" from international and regional investors, Adnoc said in a statement.
The issuance marks the first time that Abu Dhabi’s oil major has tapped the international debt markets, as it looks to new fundraising options to unlock value across infrastructure assets and optimise its capital structure to fund new projects.
“The very attractive pricing and substantial international demand for this offering positively reflects the UAE’s stable investment environment, as well as Adnoc's new and progressive approach to its long-term financing strategy,” said Dr Sultan Ahmed Al Jaber, UAE Minister of State and Adnoc group chief executive.
He added: “Importantly, this transaction enables Adnoc, for the first time, to access the international debt capital markets – thus opening an increased range of highly compelling and viable options for the long-term strategic financing of the ADNOC group.”
The issuance also demonstrates the expansion of Adnoc's strategic partnership model announced on July 10, when the company said it aimed to create new investment opportunities across all areas of its business.
State-owned oil companies across the Middle East and North Africa are seeking to extract greater value from existing assets in a persistently low oil price environment.
“The [issuance] represents an opportunity for institutional and infrastructure investors to partner and invest alongside Adnoc in selected projects,” Mr Al Jaber said.
The bond offering consists of two senior secured bond tranches: an $837m, 12-year year tranche, and a $2.2bn, 30-year fully amortising bond tranche, Adnoc said.
It said the bond was executed on “favourable” commercial terms with annual coupons of 3.65 per cent and 4.6 per cent each. The bond was rated AA by Fitch and AA by S&P, in line with the rating of Abu Dhabi sovereign bonds.
Proceeds from the issuance will be used by Adnoc to support its future growth and investment plans, the company said.
First Abu Dhabi Bank, HSBC, JP Morgan and MUFG acted as global coordinators and joint bookrunners, while BNP Paribas, Citigroup, Mizuho Securities, Société Générale and Standard Chartered Bank were joint lead managers. Moelis & Company acted as financial adviser to Adnoc.
Adcop manages a 406-kilometre pipeline that carries Adnoc crude oil from Abu Dhabi to Fujairah's oil export terminal to access international shipping routes.