ACWA Power announces pricing of $814mn bond
It is the first major private sector international corporate bond issuance from Saudi Arabia, and will significantly outperforms initial target size of $600mn
ACWA Power announced the pricing of an $814mn 5.95% bond issue with a 22 year maturity. The bond will be issued by ACWA Power Management and Investments One Ltd, a wholly-owned subsidiary of ACWA Power incorporated in DIFC.
ACWA Power set final pricing for its debut bond as the power generation and water desalination company presses ahead with plans to raise $814mn. The bond, which will be issued in US dollars, will be listed on the Global Exchange Market of the Irish Stock Exchange. The bond is secured by cash flows and certain other securities from eight operating power generation and/or water desalination plants located in Saudi Arabia.
The offering, in line with ACWA Power’s growth strategy, is designed to enable the company to diversify its sources of financing, raise longer maturity capital commensurate to the maturity profile of its asset base, repay certain existing facilities, and to enhance its funding flexibility.
The fund raising represents a transformational moment for ACWA Power and marks a key milestone in the evolution of corporate Saudi Arabia.
“The Kingdom of Saudi Arabia and ACWA Power have shown that the global markets have complete faith in the capability and capacity of the visionary Saudi government to implement the specific actions to deliver the ambitious, transformative and well publicised Vision 2030,” said Paddy Padmanathan, president & CEO of ACWA Power.
“This vote of confidence by the broad universe of debt providers reinforces what is already a solid foundation that ACWA Power has established to play a key role in the expansion of private sector participation in the power generation and desalinated water production sectors of the Kingdom as envisaged in Vision 2030.”
In a joint statement, ACWA Power’s chief investment officer Rajit Nanda and chief financial officer, Kashif Rana said that “given the appetite from all five continents across the globe that was demonstrated for such a long dated bond at this pricing from a private corporate from the Kingdom, it is not only a real testament to the unique structure and security package of the bond which has given the required financial strength, but also an acknowledgement of the quality of governance and the track record of performance of the Kingdom of Saudi Arabia.”
Moody’s and S&P are expected to rate the issuance Baa3/BBB- (outlook stable) respectively.
Jefferies is the Sole Structuring Adviser for the issuance. Citi and Jefferies acted as Joint Global Coordinators along with CCB Singapore, Mizuho, NCB Capital and Standard Chartered Bank as Joint Bookrunners, and MUFG and SMBC Nikko as co-Managers.