Saudi Electricity Co (SEC), the Gulf’s largest utility, has picked two banks to arrange meetings with fixed income investors in Europe and the United States ahead of a possible debt issue, a statement from the lead managers said.
State-owned SEC has chosen Deutsche Bank and HSBC Holdings to arrange the roadshows, which begin on March19 in Los Angeles and conclude in London on March 25.
A dollar-denominated bond issue may follow, subject to market conditions, the statement added.
Saudi Electric last tapped the international bond market in March 2012, pricing a $1.75 billion two-part Islamic bond split between a $500 million five-year portion and a $1.25 billion piece which had a 10-year lifespan.
The former was trading at a z-spread of 114basis points at 0700 GMT, while the longer-running tranche was at 137 basis points, according to Thomson Reuters data.
The z-spread is a pricing tool aimed at expressing relative value by calculating the number of basis points that need to be added to a zero-coupon yield curve to make the bond’s discounted cash flows equal the bond’s present value.
Fitch Ratings affirmed Saudi Electric’s AA- rating in February, citing high government ownership and its monopoly position against its weakening standalone credit fundamentals.
Saudi Electricity picks banks for dollar sukuk sale