Etisalat lines up €3.1bn bond issue to refinance Maroc Telecom loan

Etisalat signed a Dh15.99 billion multi-currency loan to finance the acquisition of Maroc Telecom. Delores Johnson / The National

The telecoms operator Etisalat is planning to issue a bond worth €3.1 billion (Dh15.51bn) to refinance its Maroc Telecom loan in what will be the largest deal of the year.

The bond will be split into four tranches, Reuters reported, citing a document from lead arrangers. The document also said that Etisalat is considering two US dollar tranches of the bond — of five and 10-year tenors – in addition to two euro-denominated tranches of seven and 12 year durations.

“This bond programme is to replace or refinance the bridge loan that Etisalat used to fund the acquisition of Maroc Telecom,” said Omar Maher, a telecoms analyst at Cairo-based EFG-Hermes.

“However, this bond programme has been created several years ago, but had never been floated because Etisalat had no need for it.”

Etisalat, rated Aa3/AA-/A+ by the main credit rating agencies, is meeting fixed income investors in London this week, having already held roadshows in the Middle East, Asia and Europe and interest is expected to be high.

UAE corporates are increasingly accessing bond markets as borrowing costs fall amid increased demand from foreign investors and turmoil in other emerging markets.

Emaar Properties and RAKBank are also reportedly meeting investors.

“It will be Emaar’s tightest debt because it’s not Emaar, it’s specifically the mall unit, which is like the jewel in its crown,” Yaser Abushaban, the executive director of asset management at Emirates Investment Bank in Dubai, told Bloomberg News.

Etisalat said last month that it had finalised the €4bn acquisition of Vivendi’s majority stake in Maroc Telecom. The Abu Dhabi telco operates in 15 countries in the Middle East, Africa and Asia.

Maroc Telecom will give Etisalat access to new African markets such as Burkina Faso, Mauritania and Mali. Etisalat operates in a number of African countries such as Nigeria, Tanzania and Sudan.

Etisalat beat Qatar’s Ooredoo for the French conglomerate’s 53 per cent shareholding last June after Ooredoo withdrew its bid because of the “lengthy” negotiations process. Saudi Telecom, Britain’s Vodafone and Korea’s KT Corp had all expressed an interest in the stake but did not submit bids for Morocco’s largest telecoms operator.

The deal was subject to approval from the Moroccan government, which has maintained its 30 per cent stake in the company. The remaining 17 per cent is publicly traded on the Casablanca Stock Exchange.

Etisalat signed a Dh15.99bn multi-currency loan to finance the acquisition with 17 international, regional and local banks.

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