ABU DHABI — UAE's National Central Cooling Company (Tabreed) on Wednesday announced that it has successfully raised $500 million (1.8 billion dirhams) with a 7-year, 2.5 percent coupon bond issuance.

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 percent and to increase the size of the final bond to $500 million. 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 percent of the final geographical allocation, with 49 percent from Europe, 21 percent from Asia and 20 percent from offshore US funds. The bond will be listed on the London Stock Exchange, alongside Tabreed’s existing 2025 sukuk.

Commenting on the issuance, Khaled Abdulla Al Qubaisi, 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. This is also a vote of confidence from investors in Tabreed’s future and the growth potential of the organization."

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 us to further expand our operations with a focus on scalable growth. The global interest in Tabreed is a testament to its strong financial position, sound business model, and leading position in the District Cooling industry.

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

For over 22 years, Tabreed has been the partner of choice for organizations seeking environmentally friendly cooling solutions to support their sustainability goals and to reduce their overall energy consumption and carbon footprint. — WAM