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Dolphin to raise US$1b from bonds
posted on 08/02/2012: 80 views
Abu Dhabi-based Dolphin Energy, which is majority-owned by Mubadala, plans to sell up to US$1 billion worth of 10-year bonds to refinance the company's existing bank debt and to pay a distribution to Dolphin's shareholders, a presentation document to investors said.
Dolphin, in which Occidental Petroleum and Total are shareholders, each holding 24.5 per cent equity, had met with fixed income investors in the UAE, the UK and the US in June 2011, but eventually delayed issuing a bond due to uncertain global market conditions at the time.
According to informed sources, the initial price talk for the bonds, which is benchmark-sized but earmarked for between US$750 million and US$1 billion, is 370 basis points over 10-year mid-swaps, and the issue could be launched as early as this week depending on market conditions.
The issue, which is set to mature on December 15, 2021, is 144a-compliant, meaning it is also open to institutional US investors.
The same banks, which organised the June 2011 roadshows are listed as, lead managers on the upcoming deal. These include Abu Dhabi Commercial Bank, BNP Paribas, Mitsubishi UFJ, Royal Bank of Scotland and Societe Generale.
Dolphin raised around US$3 billion in July 2009 to help finance a 244-kilometre gas pipeline between Taweelah and Fujairah to provide gas to two power stations in the north of the UAE.
The overall deal consisted of a US$1.6 billion bank loan, a US$1.25 billion bond and a US$218 million bank loan supported by the SACE export credit agency.
The current Dolphin bond traded to yield 4.63 per cent on the bid side in early trading, equating to 330 basis points over equivalent US Treasuries, according to Thomson Reuters data.
Current price guidance for the potential new bond would see it trade at 484 bps over ten-year US Treasuries, according to one regionally-based bond trader.
Having been agreed and signed in the aftermath of the global credit crunch, the loan debt is now regarded as expensive so a bond issue — at a time when rates are at historic lows — will help reduce Dolphin's borrowing costs.
Dolphin Energy was established to develop substantial energy projects throughout the GCC and to create long-term economic wealth and new business opportunities for GCC citizens, far into the future.
Dolphin Energy's major strategic initiative, the US$4.8 billion Dolphin Project, involves the production and processing of natural gas from Qatar's North Field, and transportation of the dry gas by sub-sea export pipeline from Qatar to the UAE, which began in July 2007.
The plant, the largest single-build gas plant in the world, is central to Dolphin's operations.
The seven-year construction programme has seen the creation of a full energy value chain — from gas wells offshore Qatar, onshore processing plant, gas export pipeline to the UAE and substantial gas supplies to customers across the seven Emirates. The Dolphin Gas Project is a regional energy network which involves the production of natural gas from Qatar's North Field, processing and extraction of valuable by-products at Ras Laffan, and transportation of the processed gas to the UAE and Oman. – Khaleej Times
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