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| Ipic | |
| Size | $2.9 billion-equivalent dual currency, three-tranche offering |
| Bookrunners | BNP Paribas, JPMorgan Chase, National Bank of Abu Dhabi, Natixis, RBS, UniCredit |
| return to the Middle East and Africa Deals of the Year index | |
The same month brought another impressive debt deal from the Gulf, this time from International Petroleum Investment Corporation (Ipic), Abu Dhabi’s state-backed investment group for the energy sector worldwide. This was a big, multi-currency offering, raising $2.9 billion equivalent in three tranches: a $750 million three-year, a €800 million 5.5-year and a €850 million 10.5-year.
It had been a while since the markets had seen something like this. The dollar tranche was the first three-year benchmark bond from a Middle East non-bank, while the euro tranches were the first from MENA into that market since March 2011 – also by Ipic. It was also the largest conventional Regulation S deal from emerging markets in 2012 to that date, with the lowest-ever coupon (1.75% on the three-year), and the largest MENA corporate transaction of the year.
“We had to go back to investors to price very aggressively, in large benchmark size, and hit a target of $2.9 billion. That is what was asked of us,” says Nick Darrant, head of CEEMEA syndicate at BNP Paribas, one of the joint lead managers on the deal. As a Regulation S trade without 144a, the deal could not be sold into US onshore accounts. “We were firmly targeting Europe-domiciled investors; this trade was going to live or die by our success in appealing to that investor base.”
Perhaps the most striking thing about this deal was who bought it. Whereas previously most of the buying had been from emerging market dedicated funds, this time the leads noticed a difference. “The order book was made up predominantly of true investment-grade European buyers, approaching the credit in the same way they would buy French and German names,” says Darrant. “This was a transformational trade from that perspective. Ipic now gets mentioned in the same breath as some big European continental peers.” It is, Darrant says, “some of the most attractive double A-rated paper on the planet”.
That’s partly to do with who owns it, but also the strength of the credit itself and its portfolio of oil and gas interests. This elevation of a frontier markets credit, in a nation that doesn’t yet even appear on the MSCI Emerging Markets Index, to the stature of a European multilateral is what demands recognition in our awards.
