Abu Dhabi National Energy Co (TAQA), the state-owned firm buying some of BP's North Sea assets, will raise $2bn from its two-part bond, amid strong demand for the deal.
Proceeds from the bond sale are to be used for refinancing debt that is coming to maturity, a source familiar with the matter said on Wednesday, declining to be identified.
The company has $1.75bn in bond maturities next year. It last tapped markets for a dollar-denominated issue last December with a $1.5bn two-tranche bond to refinance 2012 maturities.
Global demand for top-rated Gulf debt is currently very strong and spreads have tightened significantly to attractive levels for state-linked borrowers such as TAQA and International Petroleum Investment Co (IPIC). IPIC raised $2.9bn from a bond sale last month.
TAQA, over 70 percent-owned by the Abu Dhabi government, launched a $750m bond maturing 2018 at a spread of 200 basis points over U. S. Treasuries and a $1.25bn bond maturing 2023 at 210 basis points over U. S. Treasuries.
Final pricing at launch was slightly tighter than guidance issued earlier in the day, indicating strong investor appetite.
Regional traders said there was substantial demand for TAQA's new issue, with order books seen in excess of $10bn at 2pm UAE time, and the bonds already trading higher in the grey market.
"We are still in the process of book building. We have seen strong demand and expect to finalise the transaction late Wednesday or by Thursday," a spokesman for TAQA told Reuters earlier in the day.
BNP Paribas, Citigroup Inc, HSBC Holdings, National Bank of Abu Dhabi and Standard Chartered Plc are mandated bookrunners on the deal.
TAQA is the second Gulf borrower to issue bonds this week, after Gulf International Bank priced a $500m five-year deal on Tuesday, as regional companies line up to get deals away before investors close books for the year.