$3.5bn facility in Japan by Taqa

Abu Dhabi National Energy Company (Taqa) is establishing a $3.5 billion credit facility in Japan to fund acquisitions and is seeking a credit rating there to sell Samurai bonds, Taqa's chief executive said.

About 10 banks, including Bank of Tokyo Mitsubishi, are managing the three-year facility, Chief Executive Peter-Barker Homek said yesterday.

The company is 75-per cent owned by the government of Abu Dhabi, which controls more than 90 per cent of the oil reserves in the UAE. The rest of the shares are publicly traded.

The UAE is the world's fifth-largest oil exporter and the Abu Dhabi government uses Taqa as a vehicle to invest some of its record oil revenues to diversify its assets. The credit facility would be used to finance acquisitions in Japan and around the world, a Taqa spokesperson said.

Barker-Homek said the firm is seeking the Japanese credit rating to sell yen-denominated bonds at a later stage to broaden its investor base and because "Japan and the UAE relations are excellent".

Bank of Tokyo Mitsubishi is assisting Taqa in getting the rating, he added. Japan buys about 40 per cent of the UAE's oil exports.

Taqa plans to triple the value of its assets to $60 billion by the end of 2012 from around $21 billion now and in June Taqa had said it expected to announce four new deals worth around $5bn this year, including a joint venture with a major US utility.

Taqa last year made acquisitions worth some $11bn around the world, including the purchase of Canada's PrimeWest Energy Trust for $4.98 billion.

In October it agreed to sell 40 per cent of utility Emirates CMS Power Company to Tokyo-based Marubeni Corp. and said it may start new power ventures with the Japanese company.

The firm has repeatedly tapped the debt markets. Last week it closed a $1bn convertible bond and sold $1.5bn of global notes in a two-part sale.

The company has $13.1bn of loans and bonds outstanding, including debt in Canadian dollars and euros, data compiled by Bloomberg show.

Another investment arm of the Abu Dhabi government, International Petroleum Investment Company (Ipic), spent about $776 million last September on buying a fifth of Cosmo Oil Co, Japan's fourth-biggest refiner. National Bank of Abu Dhabi and Bank of Tokyo-Mitsubishi are arranging a Dh2.3 billion ($626.2 million) loan for Ipic for the Cosmo purchase, the banks said in early July.

Taqa is rated Aa2 by Moody's Investors Service, its third- highest investment-grade level, and is ranked one notch lower at AA- by Standard & Poor's.