The Abu Dhabi National Energy Company or Taqa, has sold a total of $750mn in bonds to help lower borrowing costs at the firm, which is reeling from low crude oil prices.
In a further sign of healthy investor demand for emerging market bonds, Taqa said it sold $250mn notes that mature on June 22, 2021 with a coupon of 3.625% and $500mn of bonds maturing on June 22, 2026 with a coupon of 4.375%.
The 10-year bonds have a yield of 3.8% and the five-year bonds have a 3.05% yield, according to a Taqa spokesman.
The funds will lower borrowing costs and “will be used for general corporate purposes and refinancing existing bonds”, said the company.
Taqa refinanced $1bn of its nearly $20bn debt earlier in the summer with a successful bond offering.
The company has been struggling since the collapse first of natural gas prices and then oil prices, which severely reduced the value of its overseas portfolio of oil and gas assets that it accumulated since its inception 11 years ago.
Its heavy indebtedness has limited its options and it has sharply cut capital investment and operating costs over the past couple of years to try to manage its balance sheet.
Despite significant cost reductions, Taqa in August reported a widening loss in the second quarter driven by lower realised oil and gas prices from its North American and European assets.
Revenue fell to AED4.03bn in the quarter from AED4.7bn a year earlier as it reported a net loss of Dh588m – a 40% increase on the loss reported a year earlier.
The Abu Dhabi Water & Electricity Authority (ADWEA), Taqa’s largest shareholder, has a stake of 52.3%  and toÂgeÂther with other Abu Dhabi government entities, owns just over 75% of the company, with the rest listed publicly and held by UAE shareholders.
The sale comes at a good time for Taqa, as global investors show greater appetite for emerging market bonds denominated in US dollars.
