Adnoc in talks over bank loan
The Abu Dhabi National Oil Company (Adnoc) is in talks to obtain a syndicated loan worth up to $5bn, in the latest sign that the region’s giant oil companies are increasingly turning to the debt markets to fund their expansion.
The Abu Dhabi National Oil Company (Adnoc) is in talks to obtain a syndicated loan worth up to $5bn, the latest sign that the region’s giant oil companies are increasingly turning to the debt markets to fund expansion.
Two banking sources said on Monday the company’s talks with regional and international banks were focusing on a loan that may total several billion US dollars. A third source said it was expected to be in a range of $4bn to $5bn.
The loan facility, which would have various maturities of up to five years, is one of a number of fund-raising options Adnoc is considering. It was also discussing the possibility of issuing a project bond that could be as large as $3bn, bankers said, declining to be named due to commercial sensitivities.
An Adnoc spokesman said: “As announced on July 10, Adnoc is expanding its partnership model and creating new partnership and co-investment opportunities across all areas of its value chain.
“Alongside this new partnership model, Adnoc is also taking a more active approach to managing its portfolio of assets and balance sheet to unlock value and drive growth.”
Adnoc was also “looking at the most effective capital structure for the efficient management of its business”.
Before oil prices crashed in 2014, state energy firms in the Gulf largely financed themselves with money from their governments. But low oil and gas prices mean governments’ finances are under pressure, so companies are increasingly turning to the markets.
The planned loan would be Adnoc’s first large borrowing from banks beyond a deal worth up to $3.3bn with Japanese banks, which it signed in 2016. The project bond would be Adnoc’s first dollar bond.
ISLAMIC BONDS
In April, Riyadh’s national oil firm, Saudi Aramco, raised 11.25billion riyal ($3bn) with a debut issue of Islamic bonds. Oman Oil is working on a pre-export financing loan of about $1bn after closing a $2bn loan package a few weeks ago.
Adnoc’s financing strategy is driven by Sultan al Jaber, the company’s group CE, who took charge in 2016.