Dolphin Energy to increase $1b bond issue

Dubai: Abu Dhabi's Dolphin Energy, majority-owned by state fund Mubadala, plans to raise between $200 million (Dh734 million) and $300 million (Dh1.1 billion) on top of its recently-issued $1 billion bond, a statement from lead managers said yesterday.

Dolphin Energy, in which France's Total and Occidental Petroleum Corp also own stakes, issued a $1 billion offering, maturing in 2021, on Tuesday — attracting $9 billion of demand from international investors. The company will now tap the bond for a further $200-$300 million, with the new capital set to price equivalent to 101 per cent of the existing paper.

Tapping an existing bond sees an issuer augment the amount of money it originally raised, using the same paperwork as before, essentially tacking on an additional sum to raise the overall value of the bond.

Using a tap is a rare mechanism in the Middle East and is usually used when the original bond has attracted overwhelming demand. Qatar Telecom did it in October 2010, when it added a further $1.25 billion to a $1.5 billion bond it printed seven days before.

The same bookrunners who organised the original bond — Abu Dhabi Commercial Bank, BNP Paribas, Mitsubishi UFJ, Royal Bank of Scotland and Societe Generale — are marshalling the tap.