Abu Dhabi Taqa Launches $1.5bn Dual-Tranche Bonds on ADX
By issuing dual-tranche bonds valued at $1.5 billion on the Abu Dhabi Securities Exchange (ADX), Taqa, the Abu Dhabi National Energy Company, has substantially broadened its funding options.
Dual-Tranche Bonds on ADX
This dual-tranche listing includes a 10-year $1 billion tranche of senior unsecured notes, marking Taqa's first green bond. These notes are set to mature in April 2033 and carry a coupon of 4.696 percent. The second tranche consists of $500 million with a five-year maturity date in January 2029, issued as conventional bonds at a coupon rate of 4.375 percent, as reported by ADX.
Successful Bond Issuances
Back in April, Taqa raised a total of $1.5 billion through dual-tranche bond issuances. The aggregate order book for both conventional and green bond issuances reached nearly $15 billion, with the offering being approximately 10 times oversubscribed.
ADX Chief Executive's Remarks
Abdulla Al Nuaimi, the CEO of ADX, emphasized the significance of Taqa's sizable secondary bond listing on ADX and its contribution to the growth of the debt market. He also highlighted the increasing prevalence of green bonds listed on ADX.
Booming Market for Green and Sustainable Bonds
The market for green and sustainable bonds, particularly in GCC economies, is experiencing significant growth. Governments in the oil-rich region are actively working to meet their net-zero commitments. Last year, GCC green and sustainable bond and sukuk issuances reached a record $8.5 billion from 15 deals, compared to $605 million from six deals in 2021. This surge is attributed to greater participation from banks and government-related entities.
Taqa's Green Finance Framework
In April, Taqa unveiled its green finance framework to issue green bonds, sukuks, loans, and other debt instruments, supporting its net-zero goal. The proceeds from these deals will fund eligible green projects, including renewable energy, energy efficiency, sustainable water and wastewater management, clean transportation, and biodiversity initiatives.
Taqa's Group CEO's Statement
Taqa's group CEO and managing director, Jasim Thabet, expressed his happiness with the dual-tranche bonds' secondary listing on the Abu Dhabi debt market. He emphasized the value of green financing and decarbonization initiatives as prospects for economic growth, driven by the rising demand from domestic and international investors for reliable green investments.
In addition to its financing initiatives, Taqa reported a 5 percent increase in second-quarter revenue, primarily driven by higher demand in its transmission and distribution business. The company's revenue for the quarter ending June 30 reached Dh13.67 billion ($3.72 billion). However, net income attributable to shareholders in the second quarter decreased to Dh1.92 billion, down from Dh2.31 billion in the same period the previous year.