Global Arab Network | HSBC leads 2 major debt issues from the Middle East - IDB & Taqa

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HSBC leads 2 major debt issues from the Middle East - IDB & Taqa

Global Arab Network - - George Haddad

Saturday, 12 September 2009 21:55

HSBC led two major debt issues from the Middle East for Islamic Development Bank (IDB) and Abu Dhabi-based Abu Dhabi National Energy Company (Taqa), which closed on 10th September.

1. Islamic Development Bank sukuk:

- Size: $850m
- Tenor: Five years
- Price: 77 basis points over US Treasuries
- Order Book: $2bn (2.4 times oversubscribed)

- Distribution:

Asia: 30%
UK: 15%
Europe: 20%
Mena: 35%

- Investor Type:

Banks and Treasury: 40%
Central Banks/Reserve Managers: 21%
Fund Managers: 34%
Insurance Funds: 5%

Mohammed Dawood, Director Debt Capital Markets, HSBC Amanah, said:

'IDB is a transaction with several notable factors: First, IDB has successfully placed its sukuk during Ramadan, traditionally a period when the Middle East markets are very quiet. Second, there was a strategic objective to broaden the investor base for this rare borrower, which is shown vividly by the global distribution profile, included a large portion from investors that have not invested in paper from this issuer before. All of which provides further evidence of the re-opening of the sukuk market in 2009, and the strong international interest that sukuk are receiving from investors all over the world.'

2. Abu Dhabi National Energy Company (TAQA) Reg S/144a bond issue:

- Size: $1.5bn (in two tranches)
- Tenor: Five years/Ten years
- Price: 5 year tranche: 250 basis points over US Treasuries / 10 year tranche: 287.5 basis points over US Treasuries
- Order Book: $12bn (8 times oversubscribed)

- Distribution:

5 year
Middle East: 26%
Asia: 16%
Europe: 33%
US: 25%

10 year
Middle East: 8%
Asia: 15%
Europe: 40%
US: 37%

- Investor Type:

Banks and Treasury: 32%
Central Banks/Reserve Managers: 10%
Hedge Funds: 16%
Insurance Funds: 42%

Andrew Dell, Head of CEEMEA Debt Capital Markets, HSBC, said, 'Taqa is a well known borrower who has again a spectacular success with a well priced and very swiftly executed deal. The virtue of preparation and decisive intra day focus came on the back of a pre-summer investor update roadshow. Investors gained confidence from the clear guidance on total size all of which contributed to the heavy oversubscription. Bonds traded up solidly into Thurs.'

Global Arab Network

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