Mubadala plans bond for expansion

Mubadala Development Company said yesterday it was considering issuing bonds to finance future projects although the Abu Dhabi-based firm is one of the wealthiest public enterprises in the Middle East.

The government-owned company said such projects would cover financial services and other sectors to expand its existing portfolio of investments in real estate, telecommunications and the upstream oil and gas industry

"I know Mubadala's is enjoying a strong financial position but that does not mean it can not issue bonds or sukuk," said Greg Fewer, an adviser at Mubadala's Project and Corporate Finance section.

"The company is currently considering such an issue but I cannot say what the exact plan is or when or how… the bond market in the UAE is becoming very attractive and Mubadala could join other companies in issuing bonds or sukuk, depending on a board decision," Fewer told Emirates Business at the Middle East Project Finance conference that opened in Abu Dhabi yesterday.

Fewer said Mubadala had not sought credit rating from international agencies on the grounds it does not need rating at present. He noted good rating for any company would allow it to get loans with better terms.

"There is no decision yet regarding the rating… as for our investment plans, we are looking for the best opportunities whether here in the UAE or in other countries. At present we are considering investing in financial services in the country but we are also looking at other sectors," he said.

"I cannot say which markets we will target as we try to regularly follow up and identify opportunities. As for the United States, it is still an attractive market, which should not be shunned, despite the sub-prime crisis."

In his paper at the conference, Fewer said Mubadala would continue to fund projects and identify investment opportunities.

He noted that a surge in projects in the UAE and other oil-rich Gulf countries have sharply boosted demand for bank credits while supply has receded.

"There is a widening gap now between supply and demand for credits mainly because of a surge in projects in the region… supply is decreasing and banks are expected to become more choosy this year," he said.

Mubadala Development Company has not sought any loans since it was created more than 10 years ago although it has invested heavily in some major projects in the UAE and other countries.

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