Abu Dhabi’s Mubadala plans $6bn debt reorganisation

IPIC and Mubadala’s debt will sit under only one public investment vehicle



Abu Dhabi’s state investor International Petroleum Investment Company (IPIC) is to reorganise about $6bn of debt following its merger with state investment fund Mubadala Development Company (MDC) last year.

IPIC has asked bondholders to agree to Mubadala Investment Company – the merged entity – becoming guarantor and MDC the issuer of over $6bn of IPIC’s existing debt.

“The end result will be a more efficient single, rated entity within the group responsible for our capital market funding activities,” Mubadala said in a statement.

The planned reorganisation of the bonds means IPIC and MDC’s debt will sit under only one public investment vehicle, MDC.

The request to bondholders covers holders of $1.5bn IPIC bonds due in 2020, 1.25bn euro ($1.45bn) bonds due in 2021, $1.5bn due in 2022, 850m euro due in 2023, 550m pounds ($716.82m) maturing in 2026 and $750m due in 2041, according to IPIC’s announcement.

BNP Paribas, Citi, Deutsche Bank, First Abu Dhabi Bank, and Merrill Lynch International have been appointed to work on the proposed transaction.

S&P Global Ratings said the debt transfer to MDC did not change its view on the credit worthiness of the company or its rating. MDC is rated AA by the agency.

“The transfer of strategic assets to MDC from IPIC will broaden MDC’s asset base and support its mandate to develop and diversify Abu Dhabi’s economy,” S&P said.

Mubadala had total assets worth Dhs832bn ($226.53bn) for the six-month period ending in June, the company said last month. The figure includes consolidated holdings of Abu Dhabi Investment Council (ADIC), which merged with Mubadala in March this year.