Scommessa su Abu Dhabi... hanno chiesto 1,75 mld $, oversubscribed (richieste per 9 mld $)
http://www.thenational.ae/article/20090429/BUSINESS/904299983/-1/NEWS
Mubadala offers $1.75bn bonds
Wayne Arnold
- Last Updated: April 29. 2009 9:48PM UAE / April 29. 2009 5:48PM GMT
Mubadala Development, the Abu Dhabi Government’s strategic investment arm, offered US$1.75 billion (Dh6.42bn) in bonds to international investors, just days after publishing its annual report for the first time that disclosed almost Dh12bn in losses.
Bankers familiar with the deal told Reuters that it included $1.25bn in five-year bonds that were likely to pay an interest rate 3.95 percentage points more than the rate on five-year US treasury bonds.
Mubadala will also sell $500 million in 10-year bonds, bankers said, at 462.5 basis points over US treasuries. That would translate into an interest rate of roughly 6.2 per cent on Mubadala’s five-year bonds.
The bond sale comes as Mubadala shifts gears in line with the global economic recession. After a spate of high-profile investments such as buying a major stake in Advanced Micro Devices, the US chipmaker, and an $8bn finance venture with General Electric, the company plans to focus on turning its investments into profitable businesses.
“We’ve been in business-building mode. Now we’re in execution and delivery mode,” said Waleed al Muhairi, Mubadala’s chief operating officer. “I want more finished businesses.”
Mr al Muhairi declined to comment on the bond sale or how Mubadala planned to use the proceeds, citing US regulations that limit company disclosures during the auction of securities.
Mubadala’s annual report has already shed remarkable light on a Government-owned company whose ambitious growth has attracted international attention.
“It’s exceptional for a company like Mubadala, which is not listed, to be so transparent,” said Farouk Soussa, head of Middle East government ratings at Standard & Poor’s in Dubai.
Sovereign wealth funds have come under increasing pressure from critics abroad to be more transparent.
Despite an international accord signed last October among a group of countries representing the funds and their major beneficiaries that called for greater public disclosures, most have divulged very little.
And because they rely for funding only on their government owners, very few have had to.
Raising funds from international investors requires a greater level of disclosure but not necessarily an annual report. “You might as well go all the way,” Mr al Muhairi said of the company’s decision to release its financial results. “It’s a natural evolution of what we’re doing.”
Mubadala has the task of diversifying Abu Dhabi’s economy and creating jobs, all while making money for its sole shareholder, the Government.
That, Mr al Muhairi said, requires Mubadala to submit all its investments to a “double bottom-line.” Each one has to fit in with Abu Dhabi’s strategic vision for its development, while presenting a compelling business case.
“If we’re unable to restructure it in a way that makes it viable, we won’t do it,” said Mr al Muhairi. “We don’t want to contaminate or dilute the discipline we have in the way we deploy capital.”
That kind of discipline was mirrored the company’s move to mark down the value of its investments last year by Dh8.8bn, in line with the mayhem in markets in the fourth quarter.
Those losses included a Dh3.3bn write-down of the value of oil assets at Pearl Energy, a South East Asian oil and gas company that Mubadala bought last May, as well as a Dh2.2bn write-down on the value of Mubadala’s shares in General Electric, bought after the two companies in July announced their joint venture plans.
Mubadala wrote down another Dh2bn on its investment in Carlyle, about Dh1bn on its AMD holdings and another Dh1bn for its 15.8 per cent stake in Aldar Properties.
“We’re being quite stringent,” said Mr al Muhairi. Without such write-downs, Mubadala would have posted about a Dh2bn profit, and he hastened to point out that none of its investment losses had been realised through sales.
And while Mubadala reported about Dh12.6bn in debt at the end of last year, Mr al Muhairi said none of its loss-making investments had been financed by debt.
Mubadala still plans to make new investments, particularly in its venture with GE, a global commercial-finance venture that Mr al Muhairi said he hoped would start contributing to Mubadala’s profits this year.
Mr al Muhairi said the company was likely to take a more measured pace, however, cutting costs and building out its projects more slowly. “As we look at the market conditions, it’s a different world,” he said. “It means you start smaller, not later.”
Mubadala still aims to complete the first phase of its aluminium smelter, slated to be the world’s largest, by December. But Mr al Muhairi said the second phase of the project would be rolled out later than would have been the case before the global recession.
Taking a more cautious approach is consistent, he said, with Mubadala’s long-term investment horizon of roughly seven years. It took seven years, he said, before the company’s first project, Dolphin Energy, started yielding profits. Mubadala inherited Dolphin Energy from the UAE Offsets Group when Mubadala was founded in 2002. Now it accounts for roughly four-fifths of Mubadala’s revenue.
It also reflects the conservatism, he said, of Mubadala’s shareholder, the Abu Dhabi Government. Mubadala submits all of its investment proposals to the Government each year for funding, and has so far received Dh39.2bn, an investment it has converted into Dh54bn in assets.
It is due to receive an additional Dh21bn this year, which amid falling oil prices represents a larger portion of Abu Dhabi’s diminishing annual revenues.
Mr al Muhairi said he expected the value of the assets to triple in five years. That stands in contrast to other Government investment funds, such as the Abu Dhabi Investment Authority and the Abu Dhabi Investment Council, which are more passive recipients of the emirate’s revenues to invest abroad.
How much Mubadala receives depends on its own funding needs, Mr al Muhairi said, not on how much the Government’s revenues rise or fall. “We’re pull, not push,” he said.
