OETC ... planning dollar bond issue
Oman electricity co to meet investors for potential debut dollar bond issue
DUBAI, April 21, 2015
State-owned Oman Electricity Transmission Co (OETC) plans to meet fixed income investors for a potential debut US dollar bond issue, a document from lead arrangers showed.
The firm, which develops, operates and maintains power transmission grids in Oman, has chosen Bank Muscat and JPMorgan to arrange investor meetings in the United States and Europe. No further details were provided by lead arrangers.
The issue could be around $1 billion, rating agency Standard and Poor's said after assigning a preliminary BBB-plus to the issue. Supporting the rating is OETC's "very strong" link to Oman's government and its monopoly status as the sole transmission system operator, S&P said.
It added that OETC was exposed to potential privatisation risk, but: "We expect that, after any potential change in ownership, the government would continue to maintain a controlling stake in the company."
OETC is expected to invest around 540 million rials between 2015 and 2019 to meet its demand growth, rating agency Moody's said in a note.
"OETC intends to fund its investments with third-party debt that will result in a more levered financial risk profile - with debt/capitalisation in the 50-55 per cent range - and will require frequent access to the debt markets in the coming five years," Moody's added.
It assigned a provisional A3 rating to proposed dollar-denominated senior unsecured notes which would be issued by Lamaar Funding Ltd and unconditionally guaranteed by OETC.
OETC is expected initially to raise around 300 million rials from the debt capital markets to repay short-term loans of 223 million rials, with the rest of the proceeds earmarked for capital spending, Moody's said. -- Reuters
