x Abu Dhabi, UAESunday 23 July 2017

IPIC's first bond is 4.4 times oversubscribed

The International Petroleum Investment Company saw large demand for its $2.5bn bond offering.

Investors placed orders for US$11 billion (Dh40.39bn) of bonds sold this week by the International Petroleum Investment Company (IPIC), an Abu Dhabi Government-owned vehicle that holds some of the emirate's most high-profile foreign investments.

The $2.5bn bond, IPIC's first, was 4.4 times oversubscribed, the fund said in a statement yesterday.

"IPIC continues to establish new precedents for Abu Dhabi," said Khadem al Qubaisi, the managing director of IPIC. "It has always been an objective of IPIC to diversify our capital structure and partner with the international capital markets.

"The success of this bond clearly demonstrates IPIC's creditworthiness in the eyes of the international capital markets and we look forward to enhancing the established partnerships which have been founded in our first issuance."

IPIC, which through its Aabar Investments subsidiary owns large stakes in the German car giant Daimler and Richard Branson's commercial space flight venture Virgin Galactic, decided to tap into global debt markets to broaden its mix of financing sources.

It has traditionally received funds for its operations and investments directly from the Abu Dhabi National Oil Company.

The $2.5bn bond comprises $1bn that matures in five years and comes with 3.125 per cent annual interest, and $1.5bn that matures in 10 years and pays 5 per cent yearly interest.

This month, IPIC said in the prospectus for the bond that it would scale back on asset purchases after building a portfolio worth $48.2bn at the end of June.

It also said it made $159.2 million of profits in the first six months of this year, compared with $2.65bn for the same period last year.

The issuance comes during a buoyant time for global debt markets. Several companies and governments in the Gulf - including the Dubai Government, Emaar Properties and the Dubai Electricity and Water Authority - have taken advantage of improving sentiment to issue bonds in recent months.

 

afitch@thenational.ae