Taqa seeks $1bn to refinance, expand

Abu Dhabi National Energy is seeking to raise up to US$1 billion to refinance a credit facility and help fund further expansion.

Abu Dhabi National Energy (Taqa), the global oil and gas investment firm, is seeking to raise up to US$1 billion (Dh3.67bn) to refinance a credit facility and help fund further expansion. A senior company official said Tuesday Taqa might issue bonds or take out loans to raise the funds. "The company does not have any immediate financial obligations but in the meantime we are looking at different options of refinancing," said Mohammed Mubaideen, the investor relations manager at Taqa. "At some point in time before our debt is due in July 2010, we might raise finance."

State and corporate issuers in the Gulf have raised more than $15bn in bonds over the past four months, including Aldar Properties, the largest property developer in Abu Dhabi, and Mubadala Development, the emirate's strategic investment arm. The Abu Dhabi Government owns 75 per cent of Taqa, which is listed on the Abu Dhabi Securities Exchange. It has an asset base of more than $23bn with investments in power generation, water desalination, upstream oil and gas, pipelines and gas storage.

It has already invested $1.5bn this year and is looking to spend another $1.5bn over the next six to nine months as the global downturn offers more opportunities to buy assets. Taqa ended its relationship with Standard & Poor's (S&P) Ratings Services this month after the agency placed it on a negative credit watch, which Taqa said did not reflect its creditworthiness. Mr Mubaideen declined to comment on whether the S&P situation would affect future fund-raising.

It also emerged yesterday that the emirate of Ras al Khaimah may offer a coupon of between 8 per cent and 8.5 per cent on its five-year Islamic bond, a banker familiar with the deal told Bloomberg. The emirate plans to sell a "benchmark-size" issue, said the banker, who did not want to be identified before the deal was completed. Benchmark issues are usually $500 million or more. Standard Chartered and BNP Paribas are managing the sale.

The Ras al Khaimah Government sold Dh1bn of Islamic bonds in its first rated sale of the securities in May last year. * with Bloomberg [e-mail]