Tabreed raises $500 mn through 7-yr bond at 2.5 pc

JP Morgan, HSBC Jt global coordinators

BBN Report

ABU DHABI/October 21: The National Central Cooling Company (Tabreed), the leading District Cooling developer headquartered in the UAE, today has successfully raised $500 million (AED1.8 billion) with a 7-year, 2.5 per cent coupon bond issuance.

JP Morgan and HSBC acted as Joint Global Coordinators and Bookrunners for the issuance, with Commercial Bank of Dubai (CBD) acting as a Joint Lead Manager.

With orders coming from around 140 high quality local and international investors, the issuance was oversubscribed almost 5 times at its initial size of $400 million, demonstrating strong investor confidence in Tabreed’s solid credit fundamentals, despite current global economic uncertainty. This significant demand allowed Tabreed to tighten pricing significantly to achieve a final coupon of 2.5 per cent and to increase the size of the final bond to $ 500 million.

90 pc international investors

The bond is rated Baa3 by Moody’s and BBB by Fitch, in line with Tabreed’s corporate ratings. The 7-year bond was particularly well received by international investors, who accounted for 90 per cent of the final geographical allocation, with 49 per cent from Europe, 21 per cent from Asia and 20 per cent from offshore US funds.

The bond will be listed on the London Stock Exchange (LSE), alongside Tabreed’s existing 2025 Sukuk.

Commenting on the issuance, Khaled Abdulla Al Qubaisi (seen in the picture), Tabreed Chairman said the success of the issuance is proof of the continued confidence in Tabreed and its ability to generate sustainable cash flows and returns.

“Our solid fundamentals and strong credit ratings have translated into unprecedented market appetite, and I am proud to say that this has enabled us to attract significantly oversubscribed demand from a diverse pool of investors,” he added.

Bader Saeed Al Lamki, Tabreed Chief Executive Officer, said the bond issuance, which was extremely well received by the market, is part of a long-term strategy and it enables the company to further expand its operations with a focus on scalable growth.

Prestigious line-up of clientele

With 83 district cooling plants, Tabreed currently delivers over 1.342 million refrigeration tons to key projects such as the Burj Khalifa, Dubai Opera, The Dubai Mall, Sheikh Zayed Grand Mosque, Al Maryah Island, Yas Island and Ferrari World Abu Dhabi, Dubai Metro, the Bahrain Financial Harbour (BFH)  and the Jabal Omar Development in the Holy City of Mecca in the Kingdom of Saudi Arabia.

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