Dubai Electricity & Water Authority’s planned six year dollar bonds may yield about 6.7 percent, according to two people with knowledge of the sale.
The 10 year notes may yield about 7.7 percent, said the people who declined to be identified because the terms aren’t set. The state owned utility company may sell benchmark sized bonds, which are usually $500 million or more, two bankers familiar with the transaction said earlier today.
DEWA in April raised $1 billion by selling five year dollar denominated bonds offering a coupon of 8.5 percent. The issue was yielding 6.446 percent, up 1 basis point, at 3:56 pm in Dubai, according to data compiled by Bloomberg.
The Dubai government raised $1.25 billion last month in its first sovereign sale since Dubai World sought to delay payments of $24.9 billion debt last year.
Gulf issuers sold more than $9 billion of bonds in the three months until the end of September, the most for a quarter since borrowers raised $16 billion in the final three months of 2009, as investor confidence improved. Dubai received orders of about $5 billion for its two part sale.
Moody’s Investors Service today raised its outlook on DEWA, including related entities DEWA Funding and its guaranteed debt instruments, to “positive” from “stable.” It converted its issuer rating to a Ba2 corporate family rating.
The change reflects “DEWA’s ongoing efforts to extend its debt maturity profile, thereby strengthening its liquidity profile,” Dubai based analyst Martin Kohlhase said today in an emailed report. Moody’s may upgrade the company in the medium term “provided that DEWA continues to prudently manage its debt maturity profile,” he said.
DEWA’s profit declined 8.6 percent to $408 million in the six months to June, according to the bond prospectus. The company as of Aug 31 had debt of $6.69 billion.
Dubai World, one of the emirate’s three main state owned holding companies, said Sept 10 creditors holding more than 99 percent of the value of its debt approved a plan to alter the terms.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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