x Abu Dhabi, UAESaturday 22 July 2017

Ipic readies international bond issue

The International Petroleum Investment Company (Ipic), owned by the Abu Dhabi Government, is moving closer to a deal to sell debt to international investors after more details emerged yesterday about a planned bond.

Ipic is set to go back to global markets after raising US$4.4 billion (Dh16.16bn) this year to fund a portfolio of interests that includes stakes in Austria's OMV and Canada's Nova Chemicals through a US dollar-denominated bond with tranches that mature in March 2017 and March 2022, according to reports from Dow Jones and Reuters.

While a decision on the proposed bond is not yet final, Ipic released a prospectus to the London Stock Exchange this month in connection with the potential sale and has held investor meetings in the US and Europe. The size of the bond is expected to be more than $500 million. Ipic is expected to pay 2.75 percentage points over base US interest rates on the 2017 tranche and a 3.25 percentage point spread on the 2022 tranche.

The company revealed in its prospectus that it had recently been borrowing after first tapping international investors for cash last year with a $2.5bn bond.

Ipic is relying increasingly on financing from global investors and less on injections from the Abu Dhabi Government. It had previously relied largely on direct transfers of oil revenue from the Government to finance its investments and operations.

The new bond issue is being handled by five investment banks: Barclays, JPMorgan, Natixis, SociétéGénérale and Mitsubishi Financial Group.

In its prospectus, Ipic revealed that it had $31.8bn of borrowings as of the end of June, up from $21bn at the end of last year. That contributed to a 38 per cent rise in total liabilities during the first half of the year to $44bn.

The company also reported a first-half profit of $988m, triple its $328.4m profit in the same period last year. Its assets were worth $61.8bn at the end of June.

* with agencies

afitch@thenational.ae