Taqa to refinance bonds

11 August 2016

Maturities approaching in 2017

Abu Dhabi National Energy Company (Taqa) is considering refinancing $1.25bn worth of bonds maturing in 2017, the CFO Grant Gillon told an earnings call.

Taqa has a $750m bond which matures in March 2017, followed by a $500m bond in October 2017.

The company managed to refinance a $1bn bond in the second quarter of 2016, with five and ten-year maturities. It also reduced its cost of finance.

However, the state-owned energy investor reported a loss of AED1.2bn ($326m) for the first half of 2016. This was due to a 39 per cent year on year fall in its realised oil and gas prices.

Thanks to severe cost-cutting measures, Taqa now has AED3.1bn of free cash flow, and available cash, cash equivalent and undrawn credit facilities totalling AED15.6bn. It could therefore avoid refinancing immediately if liquidity or market conditions are unfavourable.

Taqa is rated A stable by Standard & Poor’s and A3 by Moody’s, based on high levels of support from the Abu Dhabi government.

A number of Abu Dhabi government related entities have returned to the debt market in the second quarter of 2016. They are taking advantage of the yield curve set by Abu Dhabi’s $5bn sovereign international bond issuance in April.

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