Page 8 - MEOG Week 04 2022
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MEOG                                   FINANCE & INVESTMENT                                            MEOG


       ADNOC launches debt unit




       and begins bond talks




        UAE              ABU Dhabi National Oil Co. (ADNOC) this  available to us,” noting that the company is
                         week set up a new debt-issuing arm to explore  accustomed to financing itself through equity
                         new sources of finance for the state oil giant and  and limited use of loans.
                         it has begun work in earnest, kicking off a road-  Unlike Saudi Aramco and QatarEnergy,
                         show for an inaugural bond issuance.  which have tapped bond markets to raise figures
                           Named after the parent firm’s flagship crude  of $12bn and $12.5bn respectively, “we do not
                         grade, ADNOC Murban “will become the pri-  intend to access the markets in the same way our
                         mary debt capital markets issuing and rated  regional peers have done with a jumbo inaugural
                         entity for ADNOC Group”, according to a press  debt offering. More likely, we will be accessing
                         statement.                           the market in sizes of around $3 to $5bn per
                           The new arm is expected to be rated at AA  annum,” Froehlich added.
                         by Standard & Poor’s, Aa2 by Moody’s Investor   ADNOC has $6bn worth of loans maturing
                         Services and AA by Fitch Ratings, in line with  in 2022 with a further $10bn in the next three
                         Abu Dhabi’s ratings.                 years.
                           Shortly after the announcement was made,   Froehlich said that the proceeds would be
                         Reuters reviewed a note to investors which  used to refinance loans, but added that “we just
                         showed that JP Morgan and Morgan Stanley had  paid back a $1bn bank line in cash, so this bond
                         kicked off an initial bond roadshow which would  programme is not necessarily a necessity to refi-
                         run throughout the week targeting investors in  nance bank loans, but a proactive move in order
                         Asia, Europe, the Middle East and the US.  to build a curve”.
                           In an investor presentation, ADNOC chief   The presentation noted that ADNOC Mur-
                         investment officer Klaus Froehlich said: “We  ban would be a “superior proposition for bond-
                         think it’s useful for modern treasury to add  holders”, adding that investors would be paid
                         access to the debt capital markets to our financ-  before ADNOC royalties, tax and most of the
                         ing toolkit, to complete the set of instruments  firm’s operating expenditures.™
















































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