By Mohammed Abbas
Funds to pay for recent $10.5bn buying spree that includes Canadian energy firms Northrock and Pioneer.
Abu Dhabi National Energy (TAQA) could sell as much as $6 billion of bonds early next year to pay for acquisitions if credit markets improve, a company vice president said.
The state-controlled company has announced acquisitions worth about $10.5 billion in the last year and has paid $4.5 billion for the assets so far, Group Vice President for Acquisitions Manu Mehra said.
"We are looking to sell $5 billion to $6 billion of bonds in US and Canadian dollars to pay for the remaining acquisitions, subject to regulatory and third party approval, and credit market conditions," Mehra told Reuters late on Monday.
"We might be coming back to market in the first quarter of next year," he said on the sidelines of a conference in Bahrain.
The bonds would have a fixed interest rate, he said.
Taqa sold $2 billion of fixed-rate bonds in the US earlier this month under the US Securities and Exchange Commission's rule 144a that governs private placements.
Bond spreads have widened since June when defaults on US home loans made banks around the world more reluctant to lend, prompting some companies to shelve or postpone borrowing plans.
For debt on the HSBC-DIFX Middle East Conventional Bonds index, spreads have risen about 42% to 185 basis points over the London interbank offered rate, from 130 at the end of June, according to HSBC.
Taqa's purchases include Canadian energy firms, including Pogo Producing's Northrock Resources and oil and gas exploration firm Pioneer Canada. The Abu Dhabi company will include Northrock's earnings in its income statement for the first time in the third quarter, Mehra said.
Taqa has yet to complete a proposed C$5 billion ($5.21 billion) takeover of Canadian oil and gas producer PrimeWest Energy Trust.
Mehra said the Canadian dollar bonds would be used to pay for Canadian assets, without giving a breakdown.
"The size of the bond should be sufficient to naturally hedge our exposure to the currency of the asset," he said. - Reuters