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Abu Dhabi, UAESaturday 20 October 2018

Apicorp raises $750m through bond sale as it shores up finances 

The multilateral lender is looking to fund further development of the energy sector in the region

Arab Petroleum Investments Corporation has raised $750m through the sale of a conventional bond as it diversify its funding sources. Courtesy Apicorp
Arab Petroleum Investments Corporation has raised $750m through the sale of a conventional bond as it diversify its funding sources. Courtesy Apicorp

Arab Petroleum Investments Corporation raised $750 million (Dh2.75 billion) through a bond issuance this month as the lender based in Saudi Arabia shores up finances to fund further development of the energy sector in the region.

The five-year bond, rated Aa3 by Moody’s Investors Service, the fourth-highest investment grade, was sold by Apicorp’s newly established $3bn global medium term note, the lender said in a statement on Wednesday. The deal was oversubscribed with the order book growing in excess of $3.5bn.

The multilateral development bank owned by 10 member states of the Organisation of Arab Petroleum Exporting Countries, said more than 80 per cent of the deal was placed with international accounts outside of the the Middle East, and 36 per cent of the bonds were allocated to first-time US investors, as the bank diversifies its sources of funding and investor base. Credit Agricole, Commercial International bank, HSBC, JP Morgan and Standard Chartered, were the joint lead managers and bookrunners on the deal. The co-managers included Bank ABC, First Abu Dhabi Bank and Union National Bank.

“Being able to complete transactions of such profile and with such a wide and international investor base is not only an endorsement of our strong balance sheet, but is also in line with our strategy of [funding source] diversification,” Ahmed Attiga, Apicorp’s chief executive, said. “With this latest transaction, we have successfully reinforced our strong relationship with the global investor base, in particular … US investment community.”

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Earlier this month in an interview with The National Mr Attiga said Apicorp is preparing to issue three bonds in the range of $500m to $750m each next year, as the group looks to expand its regional portfolio to include more renewables.

The latest deal is the third benchmark issue for Apicorp following a sukuk in October 2017, which was issued off its $3bn sukuk programme. In March, the bank raised 630m Chinese renminbi ($100m) through its debut dim sum bond.

Given that Apicorp has previously only accessed the public sukuk, regional local currency and Asian private placement markets, a key objective for the company for the latest deal was to achieve deeper access into western portfolios, the lender said.

Apicorp reported nearly a threefold increase in net profit for the first half of 2018, buoyed by its corporate finance and investment divisions. Net profit for the first half of the year surged to $150.3m from $41.8m in the year earlier period.