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29 March 2024

Dewa succeeds in promoting $2bn bonds

This is the second foray of Dewa this year to the USD debt market. (FILE)

Published
By WAM

Dubai Electricity and Water Authority (Dewa) successfully accessed the international debt capital markets raising a total of $2,000 million split across two tranches of $500 million maturing in October 2016 at the initial price of 6.375 per cent, and $1,500 million maturing in October 2020 at the initial price of 7.375 per cent.

The offering was a drawdown of the company's existing $3 billion Global Medium Term Note Programme (GMTN).

This transaction represents Dewa's second foray into the US Dollar debt capital markets in 2010 and was met with material demand from the international fixed income community. The proceeds of the fund raising exercise are intended to support Dewa's capital expenditure and other investment plans.

Citi, Credit Agricole Corporate & Investment Bank, the National Bank of Abu Dhabi, Standard Chartered Bank and The Royal Bank of Scotland plc acted as joint-bookrunners on the offering.

Dewa, a recognised provider of utility services, is a 100 per cent Government of Dubai owned entity and benefits from being the sole provider of potable water and electricity to the Emirate of Dubai, by Government decree.

In relation to the offering, a single roadshow team consisting of Dewa senior management embarked on a focused series of investor meetings in London, New York and Boston, to provide an update on Dewa's performance for the first half of the year and gauge investor's continued interest in the company's credit story.

Feedback was very positive and prior to announcing any offering, the rating agency Moody's changed its outlook on DEWA from "Stable" to "Positive", in line with the strong demand for DEWA's credit and the availability of additional liquidity post completion of a new offering.

The ultimate aggregate orderbook closed in excess of $13 billion, with over 380 accounts showing interest in the 6-year offering while around 470 investors put in orders for the 10 year bond.

DEWA capitalised on the current buoyant market conditions by successfully extending their credit curve and adding competitively priced liquid benchmark points to their maturity profile.

Ultimately 30 per cent of the offering was placed with US investors, 38 per cent in Europe, while the remainder was placed in Asia (16 per cent) and the Middle East (16 per cent).

Saeed Mohammad Al Tayer, the Managing Director and Chief Executive Officer of DEWA, commented: "We are delighted to have established longer-dated maturities for the company which will support our capex plans and other investments. We believe DEWA continues to offer an attractive investment opportunity to the international fixed income investor base and given our clear and focused business strategy, we believe the company will continue to offer such metrics for the foreseeable future. This is an affirmation of the continuing investor confidence in the Dubai credit story"

Nasser Akil Abbas, DEWA's Senior Director of Treasury, who spearheaded the investor meetings, said: "Having completed a highly successful transaction in April 2010, we anticipated similar significant appetite towards DEWA's credit, however, we remain highly impressed with the level of understanding the fixed income investor community has shown towards our company since then. Clearly our previous issue as well as the efforts we have made to maintain regular dialogue with such investors has paid off."