Abu Dhabi National Oil Company (ADNOC) has issued a $3bn bond through its subsidiary Abu Dhabi Crude Oil Pipeline (ADCOP).

In a statement released on 6 November it said the bond issuance was oversubscribed by more than three and half times.

The issuance is one of the Middle East’s biggest-ever non-sovereign bond offerings.

ADCOP owns a 406km pipeline that carries crude oil from a collection centre in Abu Dhabi to the Fujairah oil export terminal.

The pipeline has been operating since 2012 and in 2016, it had an average throughput of approximately 615 thousand barrels per day. The pipeline is designed to transport 1.5 million barrels per day of crude oil, with the ability to increase its capacity to 1.8 million barrels per day through the use of drag-reducing agents.

Commenting on the transaction, Sultan Ahmed Al-Jaber, UAE Minister of State and ADNOC Group CEO said:

“This transaction is a clear and tangible example of the new steps we are taking at ADNOC to proactively manage our portfolio of assets and, in particular, unlock value from our sizeable infrastructure base, as we seek to drive and maximize value across our business.

“This bond represents an important, initial milestone in our efforts to fully optimize our capital structure in a smarter, more efficient and flexible manner.

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.

“In addition, it demonstrates the expansion of our partnership model and represents an opportunity for institutional and infrastructure investors to partner and invest alongside ADNOC in selected projects.”

The bond offering consists of two senior secured bond tranches. One was a $837m 12-year bullet bond tranche (Series A) and the other was a $2,200m, 30-year fully amortising bond tranche (Series B).

The bond issuance was executed with annual coupons of 3.65 per cent and 4.6 per cent for the Series A and B respectively.

In its statement ADNOC said the offering was significantly oversubscribed, exceeding $11bn in orders, with strong demand from both international and regional accounts.

The bond was rated AA by Fitch and AA by S&P, in line with the rating of Abu Dhabi sovereign bonds.

The final geographic allocation for the 12-year tranche was 8 per cent to Asian investors, 42 per cent to European investors, 43 per cent to US investors and 7 per cent to investors from the MENA region.

The final investor type allocation for the 12-year tranche was 8 per cent to banks and private banks, 70% to fund managers and 22% to agencies, pensions, insurance and others.

The final geographic allocation for the 30-year tranche was 10 per cent to Asian investors, 35 per cent to European investors, 51 per cent to US investors and 4 per cent to investors from the MENA region.

The final investor type allocation for the 30-year tranche was 6 per cent to banks and private banks, 80 per cent to fund managers and 14 per cent to agencies, pensions, insurance and others.

ADNOC says the proceeds from the issuance will be used to support its future growth and investment plans.