Bapco Energies completes $1bn Reg S sukuk issuance

20/03/2025 21:10 AST

Bapco Energies, the integrated company leading the energy transition in the Kingdom of Bahrain, has successfully completed a landmark $1 billion Reg S Sukuk issuance with a concurrent capped tender offer for up to 25% of its outstanding $1 billion 7.5% Notes due 2027, thus reinforcing its commitment to financial prudence and market leadership.

The Bahraini energy giant returned to the international capital markets on January 16, 2025, with this 10-year sukuk offering.

The issuance was met with overwhelming demand, attracting an order book exceeding $4 billion, representing a four-fold oversubscription. This strong interest highlights investor confidence in Bapco Energies' robust market position and financial strength.

The tender offer, launched on 13 January 2025, saw robust participation, with more than $200 million of Notes tendered and accepted by Bapco Energies.

The sukuk issuance under Bapco Energies $3 billion Trust Certificate Programme, priced at a competitive 6.250% profit rate, marked the tightest ever spread to US Treasuries for a Bapco Energies issuance, thus reflecting the company's strategic approach to capital market engagement.

The transaction drew a diversified global investor base, with 80% allocated to GCC investors, 12% to the UK, and 4% each to US offshore and other markets.

The parallel execution of the tender offer and sukuk issuance aligns with Bapco Energies' proactive capital structure optimisation and liability management, allowing for effective debt maturity management and enhanced financial flexibility.

The repurchase of the notes supports Bapco Energies' long-term financial strategy, strengthening its balance sheet while maintaining liquidity for future strategic investments, it stated.

Bapco Energies' Group CEO Mark Thomas said: "These transactions underscore our commitment to disciplined financial management and proactive investor engagement. The strong participation in the tender offer and the success of our sukuk issuance highlight Bapco Energies' resilience and the market's confidence in our strategy."

"We continue to position ourselves as a key player in Bahrain's energy transition and a trusted issuer in global capital markets," he stated.

According to Thomas, the sukuk proceeds will support Bapco Energies' ongoing investment in the kingdom's energy infrastructure and strategic initiatives aligned with the National Energy Strategy.

Bapco Energies remains committed to opportunistically tapping global capital markets to optimise liquidity and funding costs, ensuring sustainable growth and financial stability, he added.