Taqa sells $1.5bn in bonds

State-run Abu Dhabi National Energy Co (TAQA) on Monday sold $1.5 billion in bonds maturing in five and 10 years to refinance upcoming debt. 

The company issued $750 million in five-year bonds paying a premium of 330 basis points over comparable US Treasuries, and an equal amount of 10-year paper at a spread of 390 basis points over Treasuries, Thomson Reuters' IFR reported.

EARLIER: Taqa aims to raise at least $1 billion from a two-tranche bond sale pricing on Monday, lead arrangers said, to help refinance debt maturing next year.

Taqa, which is 75 per cent owned by the government of Abu Dhabi, last month said it would buy back a $1.5 billion bond maturing October 2012 and enlisted four banks to sell new debt.

Guidance for the long five-year tranche maturing 2017 is set at 350 basis points over 5-year U.S. Treasuries and 412.5 bps over 10-year Treasuries for the portion maturing 2021.

The indicated guidance correlates to a yield of around 4.45 percent for the 2017 tranche and about 6.18 percent for the 2021 maturity.

Both tranches are indicated as benchmark-sized, meaning at least $500 million each. Two sources said the company was eyeing $1.5 billion from the deal.

Last week, Qatar printed a $5 billion bond in a three-tranche deal making it the biggest issue from the region this year.

Like Qatar, Taqa is also going for a Reg S/144a deal which makes it open to institutional US investors.

Taqa's existing bonds fell after the guidance was released, as investors made room for the new issue.

"The new ones look good, what remains to be seen is investor appetite," said one regional fixed income trader.

Taqa's $500 million 6.165 per cent 2017 maturity was yielding about 4.5 per cent on Monday, up from 4.42 per cent on Friday, according to Reuters data. The yield on its $1 billion 2016 maturity carrying a coupon of 5.875 per cent rose to 3.944 per cent on Monday from 3.682 per cent on Friday.

Bank of America, RBS, Standard Chartered and Mitsubishi UFJ are arranging the deal.

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