Arabian Post Staff -Dubai
The transaction, launched on Monday, October 19, comprises a long five-year tranche and a 10-year tranche of senior unsecured notes. Initial pricing discussions placed the shorter maturity at approximately 130 basis points above US Treasury yields and the longer maturity at around 140 basis points.
The company is targeting settlement on October 26, with the shorter tranche scheduled to mature on April 26, 2032, and the longer tranche on October 26, 2036. Final pricing, individual tranche sizes and the aggregate amount raised have not been independently confirmed.
The offering follows TAQA’s $1.75 billion dual-tranche bond placement in October 2024, which comprised conventional and green securities. That transaction included $900 million of seven-year notes and $850 million of 12-year green bonds.
The latest transaction is structured under Rule 144A and Regulation S, allowing securities to be marketed to qualified institutional buyers in the United States and eligible investors in international markets, subject to applicable securities regulations.
TAQA has appointed nine financial institutions as joint bookrunners and joint lead managers. They are Abu Dhabi Commercial Bank, Citi, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, Industrial and Commercial Bank of China, JPMorgan, Mashreq and Standard Chartered Bank.
Citi, HSBC and Standard Chartered are also serving as joint green structurers, supporting the sustainability-related aspects of the transaction and its alignment with the company’s financing framework.
The proposed notes are expected to carry investment-grade ratings broadly consistent with TAQA’s existing credit profile. Moody’s is expected to assign an Aa3 rating, while Fitch is expected to rate the securities AA, although final assessments remain subject to confirmation.
The company intends to use proceeds for financing or refinancing qualifying green investments under its Green and Blue Finance Framework, with remaining funds available for general corporate purposes.
The framework provides the basis for identifying eligible activities and allocating financing to projects meeting specified environmental criteria. Such arrangements are intended to establish a documented connection between debt proceeds and qualifying investments.
The bonds are expected to be issued through TAQA’s $20 billion Global Medium Term Note Programme, which provides a structure for accessing international debt markets through successive securities offerings.
A listing on the London Stock Exchange’s Main Market is planned, giving the securities access to an established international venue for institutional fixed-income investors.
The initial pricing indications represent preliminary borrowing spreads rather than final coupon rates. Final borrowing costs depend on investor demand, prevailing Treasury yields and the pricing agreed when the transaction is completed.
A basis point equals one-hundredth of a percentage point. Consequently, the initial spreads of 130 and 140 basis points represent premiums of 1.30 and 1.40 percentage points respectively over the relevant US government bond benchmarks.
The financing comes after changes to TAQA’s ownership and market status. The company completed its delisting from the Abu Dhabi Securities Exchange in September 2026, following the process announced earlier that month.
Its return to international debt markets provides another financing channel following that corporate transition, although the final composition of the latest placement remains dependent on the transaction’s completed terms.
TAQA’s October 2024 transaction attracted orders exceeding $6.2 billion, more than three times the amount offered. Strong demand enabled the company to tighten pricing before completing the placement.
The earlier seven-year conventional notes carried a coupon of 4.375 per cent and mature in October 2031. The 12-year green securities carry a 4.75 per cent coupon and mature in March 2037.
Proceeds from that green tranche were designated for eligible environmental investments, while funds raised through the conventional notes were allocated to general corporate purposes.
The new offering also carries provisions covering potential market stabilisation. JPMorgan Securities issued a pre-stabilisation announcement on October 19 setting out arrangements applicable to the proposed senior unsecured securities.
Under those arrangements, stabilising managers may undertake transactions intended to support secondary-market prices within the applicable regulatory limits. Such activity is permitted but is not mandatory.
The announcement specifies that any over-allotment must remain within 5 per cent of the aggregate nominal amount. The stabilisation period is expected to end no later than November 19, subject to the conditions governing the transaction.
The notice also identifies over-the-counter trading as a possible venue for stabilisation transactions, with the precise arrangements subject to confirmation.
Follow Arabian Post
Select Arabian Post as your preferred source on Google and MSN News for trusted business news and Arab politics and updates.
