The new development came at the backdrop of APICORP's plans to divest its key investments in oil and gas companies and reinvest the proceeds in projects in upstream and midstream sectors of the oil and gas value-chain across the MENA region. As part of this plan, APICORP is seeking to further consolidate its already considerably strong presence in Saudi Arabia through new investments.
Ahmad Bin Hamad Al-Nuaimi, chief executive and general manager of APICORP, said he expects a highly positive response to the bond issue from investors.
"APICORP's exceptional credit and stakeholder profiles have always enabled the company to obtain highly competitive financing. These strengths, combined with our solid balance sheet, low leverage, sound loan quality, high capital adequacy and profitable track record, will serve to bring an extremely good response," he said.
"From its inception, APICORP has been headquartered in Alkhobar and we chose the Kingdom for our first initiative to tap the capital markets since a substantial part of our direct equity investments, assets exposure and loan book are in the country. With $139 billion worth of projects set to be implemented in Saudi Arabia in the coming years, we see major future investment opportunities in the market. Conditions are very favorable for issuers with solid fundamentals like APICORP. Furthermore, the low interest rates and high liquidity environment in the Kingdom offer APICORP the optimal conditions to launch its SAR issuance to raise funds," he added.
In June, APICORP obtained a strong backing for its credit profile when it received a first-time issuer rating of A1 from Moody's Investors Service for long-term debt and Prime-1 for short-term debt. APICORP's risk-weighted capital adequacy ratio was approximately 25 percent at the end of 2009. The ratio, which is already stronger than most A-rated commercial banks, is expected to rise to around 30 percent by 2014. APICORP's extremely low leverage ratio of 3.1% and non-performing loan (NPL) ratio of 0.7 % further contribute to its stability in a difficult global financial environment. As a multilateral development bank, APICORP enjoys a de facto preferred creditor status.
APICORP has a mandate to assist the development of member states' hydrocarbon sectors through project loans, trade finance and direct equity investments.
It holds total assets of $4.1 billion at the end of 2009.
