Taqa hires banks for $2bn loan deal

31 October 2012

Abu Dhabi state-owned firm starts planning to raise money for 2013 refinancing

Abu Dhabi National Energy Company (Taqa) has hired a group of 10 banks to arrange a $2bn loan for the company to refinance an existing deal that matures in December 2013.

The new deal will be split equally between three and five-year portions and is structured as a revolving credit facility, which allows Taqa to drawdown the loan, repay it and then drawdown again. Pricing is understood to start at about 75 basis points, but steps up to a higher rate depending on how much of the loan is drawn. Even with the step ups though, the pricing is seen as aggressive by several banks.

“They see themselves as repricing Abu Dhabi government debt,” says one banker who has been approached to join the deal. Another banker who has been invited to join the deal adds: “It’s a strategic entity for Abu Dhabi, but the pricing is very thin.”

There should not be too much requirement to attract new banks into the deal though, with many of the existing lenders staying in the banking group. Banks hired to arrange the facility are the US’ Bank of America, Citigroup; Japan’s Bank of Tokyo-Mitsubishi and Sumitomo Mitsui Banking Corporation; the UK’s HSBC, Royal Bank of Scotland and Standard Chartered; France’s Societe Generale and BNP Paribas; and National Bank of Abu Dhabi.

Taqa is set to hold meetings with potential lenders on the deal in Abu Dhabi, Hong Kong and London by early November.

In 2010, Taqa, which is 75 per cent owned by the government of Abu Dhabi, signed a $2bn three-year deal along with a $1bn five-year loan. The new loan will effectively split the $2bn tranche of the 2010 transaction into a new $1bn tranche maturing in 2016 and $1bn in 2018.

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