UAE's Etisalat raises $4.3 bln in region's largest corporate bond sale

Reuters/DubaiAbu Dhabi-based telecommunications operator Etisalat sold $4.3 billion worth of bonds on Wednesday, setting one record as the region's biggest corporate issue ever and another for the cheapest pricing, bankers said. The issue's success was due partly to factors specific to Etisalat, which is rated Aa3/AA-/A+ by the main credit agencies, including its state ownership and healthy financial profile. It is also partly due to the Gulf's strong economic performance during the global instability of the past few years, which has made more investors view the region as a safe haven. In its 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 firm tightened pricing for a seven-year, 1.2 billion euro tranche to 80 basis points over mid-swaps, 20 bps inside its initial thoughts, while a 12-year euro tranche of the same size was priced at 110 bps, 15 bps within the guidance. A five-year, $500 million U.S. dollar bond was priced at 67.5 bps over mid-swaps, compared to initial price thoughts of 80 bps, and a 10-year, $500 million offering was printed at 87.5 bps, against original thoughts of 100-110 bps. The issue eclipsed past jumbo bond issues in the Gulf, including a $3.5 billion Islamic bond from Dubai property developer Nakheel which was repaid in 2009, bankers said.