Etisalat Group has announced the successful completion of a bond issuance worth one billion euros ($1.2 billion) to refinance the maturing bond tranche it had issued in 2014 ($4.3 billion) for the acquisition of a controlling stake in Maroc Telecom.
Etisalat Group issued bonds in two tranches, the first is a 7 years tranche amounting to 500 million euros with an annual yield of 0.4 per cent. The second tranche for a period of 12 years amounts to 500 million euros with an annual yield of 1 per cent.
The refinancing decision aims to diversify the company’s sources of funds and extending the repayment schedule of existing debt while taking benefit of improved cost of funding thereby maximizing shareholders value. The bond issuance was very successful as it witnessed a remarkable demand from local and international investors with being 6 times oversubscribed.
"This high demand reflects investors’ confidence in Etisalat Group’s performance, strong financial profile and credit ratings; Aa3 stable (Moody’s) and AA- Stable (S&P Global), one of the highest rating in the industry. This also highlights the growing confidence of international investors in the UAE economy," the company said in a statement.
HSBC, BNP Paribas, First Abu Dhabi Bank and Societe Generale have been hired to arrange the transaction.
In its 2014, maiden bond issue, Etisalat sold fixed-rate debt in four tranches with maturities ranging from five to 12 years to replace some of the debt used to fund its 4.2 billion euro ($5.7 billion) purchase of a majority stake in Morocco’s Maroc Telecom from France’s Vivendi.
The $4.3 billion worth of bonds issued in 2014, set one record as the region’s biggest corporate issue ever and another for the cheapest pricing, according to bankers.
In Q1 2021, the Group reported consolidated revenues of AED 13.2 billion while consolidated net profit after Federal Royalty amounted to AED 2.3 billion, representing a year over year increase of 7.9% and resulting in a net profit margin of 18%. The group had posted a net profit of Dh2.2 billion for the first quarter in 2020 (Q1).
The subscriber base reached 12.4 million in Q1 of 2021 in the UAE, while the aggregate subscriber base reached 156 million, representing a year over year increase of 4%.
In February, the Group’s twelve month consolidated revenues had reached AED 51.7 billion, while consolidated net profit after Federal Royalty for the twelve month amounted to AED 9.0 billion ($2.45 billion), an increase of 3.8% compared to 2019.