Abu Dhabi's Dolphin Energy, majority-owned by state fund Mubadala, plans to raise as much as $1 billion from a ten year bond issue, with the offering set to price as early as Tuesday, a statement from lead managers said.
Proceeds from the bond issue will be used to refinance the existing bank debt belonging to the company and to also pay a distribution to Dolphin's shareholders, a presentation document to investors said.
Initial price guidance for the offering, which is benchmark-sized but earmarked for between $750 million and $1 billion, has been given at 5.75 per cent, the document noted.
The issue, which is set to mature on Dec. 15 2021, is 144a-compliant, meaning it is also open to institutional US investors.
Dolphin Energy, in which France's Total and Occidental Petroleum Corp own stakes, completed a series of investor meetings in June but delayed plans to issue to bond citing market conditions.
The same banks which organised these roadshows are listed as lead managers on the impending deal: Abu Dhabi Commercial Bank, BNP Paribas, Mitsubishi UFJ, Royal Bank of Scotland and Societe Generale.
Dolphin raised around $3 billion in July 2009 to help finance a 244-kilometre gas pipeline between Taweelah and Fujairah to provide gas to two power stations in the north of the UAE.
The overall deal consisted of a $1.6 billion bank loan, a $1.25 billion bond and a $218 million bank loan supported by the SACE export credit agency.
The current Dolphin bond traded to yield 4.63 percent on the bid side at 1015 GMT, equating to 330 basis points over equivalent U.S. Treasuries, according to Thomson Reuters data.
Current price guidance for the potential new bond would see it trade at 484 bps over ten-year US Treasuries, according to one regionally-based bond trader.
Having been agreed and signed in the aftermath of the global credit crunch, the loan debt is now regarded as expensive so a bond issue -- at a time when rates are at historic lows -- will help reduce Dolphin's borrowing costs.