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APICORP Issues Benchmark USD750 Million Bond

APICORP Issues Benchmark USD750 Million Bond

Tuesday, 30 June, 2020 - 09:00
Cars drive past the King Abdullah Financial District, north of Riyadh. (Reuters)
Al-Dammam – Asharq Al-Awsat

The Arab Petroleum Investments Corporation (APICORP), a multilateral development financial institution, announced the issuance of a benchmark USD750 million dollar-denominated five-year bond, as part of its USD3 billion Global Medium-Term Note (GMTN) program.

This will boost the company's economic role in 2020 aimed at supporting the MENA energy sector in mitigating the impact resulting from the COVID-19 pandemic as well as oil price fluctuations.

“The issuance attracted robust and diverse investor demand, with more than USD1.1 billion in orders for the debt sale from over 40 investors of various types from within and outside the MENA region,” APICORP said.

Moreover, the five-year note’s fixed cost of funding (1.46 percent) is the lowest in the history of APICORP -- the spread of 110bps is the lowest in the region compared to the sovereign, semi-sovereign and MDB peers’ US Dollar issuances that came to the market since the COVID-19 outbreak.

“Despite challenging market conditions, the successful issuance of this benchmark US dollar bond, with this level of competitive pricing, reflects the confidence that global investors have in APICORP. We are appreciative that more than 50 percent of the investors for this issuance are central banks and official institutions, both from within and outside the region,” Dr. Ahmed Ali Attiga, APICORP’s chief executive officer, commented.

He added: “We are also pleased with the number and profile of our investors spanning MENA, Asia, Europe, and the Americas. As a trusted financial partner for supporting the sustainable development of the MENA region’s energy sector, this milestone is another step towards fulfilling our mandate and a testament to our position as a leading MDB.”

Dr. Sherif Elsayed Ayoub, chief financial officer of APICORP, said: “The remarkable achievements of this benchmark issuance attest to the effectiveness of our approach which is anchored by strong fundamentals with clear pricing and quantum objectives.

“Indeed, this issuance reinforces our strategic objective of meeting our operational ambitions by way of cost-effective financing that can add value to our partners and solidify APICORP’s profile as a high-grade issuer that is firmly within the sovereign, supranational, and agency (SSA) space.”

The Global Coordinators, Joint Lead Managers, and Bookrunners included Citibank, Emirates NBD, Goldman Sachs International, and Standard Chartered, whereas the billing and delivery agent was Standard Chartered.

Furthermore, Allen & Overy served as the issuer’s counsel, while Clifford Chance served as the banks’ counsel. KPMG undertook the role of the auditor on the issuance.

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